Slavchev v. Royal Caribbean Cruises, Ltd.

PUBLISHED

UNITED STATES COURT OF APPEALS

FOR THE FOURTH CIRCUIT

ROSEN SLAVCHEV, 

Plaintiff-Appellant,

v.

 No. 07-2036

ROYAL CARIBBEAN CRUISES,

LIMITED,

Defendant-Appellee.



Appeal from the United States District Court

for the District of Maryland, at Baltimore.

William D. Quarles, Jr., District Judge.

(1:06-cv-02630-WDQ)

Argued: December 4, 2008

Decided: March 11, 2009

Before NIEMEYER, MICHAEL, and GREGORY,

Circuit Judges.

Vacated and remanded with instructions by published opin-

ion. Judge Niemeyer wrote the opinion, in which Judge

Michael and Judge Gregory joined.

COUNSEL

ARGUED: Philip M. Musolino, MUSOLINO & DESSEL,

Washington, D.C., for Appellant. Robert P. O’Brien, NILES,

2 SLAVCHEV v. ROYAL CARIBBEAN CRUISES

BARTON & WILMER, L.L.P., Baltimore, Maryland, for

Appellee. ON BRIEF: Sylvia J. Rolinski, ROLINSKI &

SUAREZ, L.L.C., Potomac, Maryland, for Appellant. David

T. Lampton, NILES, BARTON & WILMER, L.L.P., Balti-

more, Maryland, for Appellee.

OPINION

NIEMEYER, Circuit Judge:

Relying on diversity jurisdiction conferred by 28 U.S.C.

§ 1332(a)(2), Rosen Slavchev, a citizen of Bulgaria, com-

menced this action against his former employer, Royal Carib-

bean Cruises, Limited, a Liberian corporation with its

principal place of business in Florida. Slavchev sued Royal

Caribbean for breach of contract and related claims arising

out of an alleged oral contract to provide him compensation,

beyond the payments he received for maintenance and cure,

for his disability suffered while he was employed as a seaman

with Royal Caribbean. In his complaint, Slavchev demands

"no less than" $100,000 in damages and a jury trial.

On Royal Caribbean’s motion, the district court entered

summary judgment in favor of Royal Caribbean, concluding

that Slavchev failed to advance sufficient evidence to demon-

strate the existence of a contract.

On appeal, we invited the parties to submit supplemental

briefs on subject matter jurisdiction. Now finding no subject

matter jurisdiction, we vacate the district court’s judgment

and remand for dismissal for lack of subject matter jurisdic-

tion.

I

Slavchev is a Bulgarian citizen who worked as a cleaner on

board the Royal Caribbean cruise ship Rhapsody of the Seas.

SLAVCHEV v. ROYAL CARIBBEAN CRUISES 3

While working on the ship, he was diagnosed with ulcerative

colitis, a chronic condition that responded well to medication.

After a short convalescence, Slavchev returned to work on

board the Rhapsody in April 2003. Three months later, how-

ever, he quit because he was tired and "did not have a desire

to work." He returned to Bulgaria to work as a TV salesman

and a waiter, and later he came to the United States on a stu-

dent visa and worked as a waiter and a lifeguard.

After quitting work for Royal Caribbean and returning to

Bulgaria, Slavchev continued to experience symptoms related

to his colitis and obtained treatment for the condition in Bul-

garia. When he contacted Royal Caribbean for reimbursement

of his expenses, Royal Caribbean paid him maintenance

(wages) and cure (medical expenses) until Slavchev attained

"maximum medical improvement" in February 2004. After

Slavchev’s personal physician declared that Slavchev had

reached maximum medical improvement, Royal Caribbean

ceased making payments to Slavchev, as its responsibility for

maintenance and cure had ended. See Calmar S.S. Corp. v.

Taylor, 303 U.S. 525, 530 (1938) (finding no duty "beyond a

fair time after the voyage in which to effect such improve-

ment in the seaman’s condition as reasonably may be

expected to result from nursing, care, and medical treat-

ment"); Carleno v. Marine Transp. Lines, Inc., 317 F.2d 662,

665-66 (4th Cir. 1963) (holding the duty of maintenance and

cure "is fulfilled when subsistence and medical care are fur-

nished to the point where remedial medicine and surgery can

do no more"). At the point when Slavchev had attained maxi-

mum medical improvement, his physician found him to be

60% disabled.

Slavchev does not make any claim for maintenance and

cure. Rather, he alleges that in or about December 2003,

Royal Caribbean’s claims-handling employee, Andy Gillig,

made an oral promise to pay Slavchev compensation for his

60% disability. As Slavchev testified, "Mr. Gillig told me that

another department of Royal Caribbean in Miami or some-

4 SLAVCHEV v. ROYAL CARIBBEAN CRUISES

place would cover 60 percent of my disability, and there was

a lady Samantha or something." Slavchev could provide no

further details of the agreement, except that it was made by

telephone sometime around the end of 2003. He alleges that

Gillig’s oral promise was confirmed in an e-mail that Gillig

sent to Slavchev’s employment agency, which stated, "At this

time, I will stop all of Mr. Slavchev’s sick wages, and send

his chart to claims, to be compensated appropriately for the

60% disability rating that the doctor has given him." When

Slavchev was asked about what he gave in exchange for that

promise, he testified, "I did not agree to anything, I just

waited. I said okay, and I just waited to receive—I don’t

know what happened. I was waiting for the 60 percent com-

pensation."

Based on this evidence, Slavchev commenced this action

against Royal Caribbean for breach of contract and related

duties, seeking a permanent injunction directing Royal Carib-

bean to provide him 60% disability compensation and at least

$100,000 in damages. After discovery, the district court

granted Royal Caribbean’s motion for summary judgment,

finding that no enforceable contract had been reached.

On appeal, we requested and the parties submitted supple-

mental memoranda on the district court’s subject matter juris-

diction, as well as our own.

II

In his complaint, Slavchev invoked diversity jurisdiction as

conferred under 28 U.S.C. § 1332(a)(2) and demanded to

have his claims tried to a jury. Even though he might have

invoked admiralty and maritime jurisdiction under 28 U.S.C.

§ 1333, he would not have had the benefit of a jury trial. See

In re Lockheed Martin Corp., 503 F.3d 351, 354-55 (4th Cir.

2007). Royal Caribbean suggested explicitly in its answer and

implicitly in its motion for summary judgment that the district

court also had jurisdiction under 28 U.S.C. § 1333, arguing

SLAVCHEV v. ROYAL CARIBBEAN CRUISES 5

that any maintenance and cure claim under admiralty law had

ended with the determination made by Slavchev’s personal

physician that Slavchev had reached maximum medical

improvement. Slavchev responded that even if the right to

maintenance and cure had ended, "Plaintiff neither asserted in

his complaint, nor asserts now, that his contract claim flows

from that body of law [maintenance and cure under maritime

law]. As has been made clear throughout this case, Plaintiff

asserts an enforceable agreement between himself and [Royal

Caribbean]."

To support his invocation of diversity jurisdiction, Slav-

chev alleged that he is a citizen of Bulgaria and that Royal

Caribbean is "a corporation with its principal place of busi-

ness in Florida." Slavchev did not make any allegation about

where Royal Caribbean was incorporated. When we requested

supplemental memoranda on subject matter jurisdiction, how-

ever, both parties confirmed that Royal Caribbean is incorpo-

rated under the laws of Liberia, a foreign state.

Relying on Royal Caribbean’s Florida citizenship, Slav-

chev now argues that he satisfies 28 U.S.C. § 1332(a)(2) (con-

ferring jurisdiction on the district court in cases between a

citizen of a State and a citizen of a foreign state). His argu-

ment, however, fails to address the fact that Royal Caribbean

is incorporated in Liberia, a foreign state.

Construing 28 U.S.C. § 1332(c)(1), we conclude that a cor-

poration with its principal place of business in one of the

United States and incorporated under the laws of a foreign

state has dual citizenship for purposes of diversity jurisdic-

tion. See 28 U.S.C. § 1332(c)(1) ("a corporation shall be

deemed to be a citizen of any State by which it has been

incorporated and of the State where it has its principal place

of business"). It is both a citizen of a State and a citizen of a

foreign state. Thus, this case involves a claim by an alien

(Bulgarian) against a corporation with the dual citizenship of

Florida and a foreign state, Liberia.

6 SLAVCHEV v. ROYAL CARIBBEAN CRUISES

Under the long-standing requirement of complete diversity,

which is applied to the dual citizenship of corporations, we

find subject matter jurisdiction lacking. See Peninsula Asset

Mgmt. (Cayman) Ltd. v. Hankook Tire Co., 509 F.3d 271,

272-73 (6th Cir. 2007); Creaciones Con Idea, S.A. de C.V. v.

Mashreqbank PSC, 232 F.3d 79, 82 (2d Cir. 2000); Nike, Inc.

v. Comercial Iberica de Exclusivas Deportivas, S.A., 20 F.3d

987, 990-91 (9th Cir. 1994); Chick Kam Choo v. Exxon Corp.,

764 F.2d 1148, 1152-53 (5th Cir. 1985). See generally David

A. Greher, Note, The Application of 28 U.S.C. § 1332(c)(1) to

Alien Corporations: A Dual Citizenship Analysis, 36 Va. J.

Int’l L. 233 (1995) (arguing for this approach). Cf. Straw-

bridge v. Curtiss, 7 U.S. (3 Cranch) 267, 267 (1806) (requir-

ing complete diversity as between persons).

Because the district court did not have subject matter juris-

diction, as invoked by Slavchev, we vacate the district court’s

judgment and remand for dismissal for lack of subject matter

jurisdiction.

III

For the first time on appeal, Slavchev seeks also to invoke

admiralty and maritime jurisdiction under 28 U.S.C. § 1333.

Despite the position he took in the district court, he now

argues that his contract claim, alleged to have arisen sepa-

rately from his maintenance and cure claim, is nonetheless

sufficiently connected to Royal Caribbean’s maintenance and

cure obligations to justify admiralty and maritime jurisdiction

over his contract claim.

This late invocation of admiralty and maritime jurisdiction

—for the first time on appeal—does not confer, nunc pro

tunc, authority on the district court, which purported to act

under the power conferred by diversity jurisdiction.

More importantly, Slavchev has not demonstrated that his

claims fall within the admiralty and maritime jurisdiction con-

SLAVCHEV v. ROYAL CARIBBEAN CRUISES 7

ferred by 28 U.S.C. § 1333. We conclude that they do not and

hence would not support the district court’s subject matter

jurisdiction.

Slavchev alleges that around the time that Royal Caribbean

discharged its maintenance and cure responsibilities, it

incurred responsibilities under an oral contract by which it

agreed to pay Slavchev compensation for his 60% disability.

If such a contract had been created, it was surely a claim at

law for breach of contract and not a claim for breach of a mar-

itime contract. The contract was made some five months after

Slavchev left his maritime employment with Royal Carib-

bean, while he was working in Bulgaria as a television sales-

man or a waiter. It was allegedly formed during a telephone

conversation between him in Bulgaria and Gillig in Florida

and thus was "a contract made on land, to be performed on

land." People’s Ferry Co. of Boston v. Beers, 61 U.S. (20

How.) 393, 402 (1857) (holding that shipbuilding contracts

were not within the admiralty and maritime jurisdiction).

Moreover, his claim depends on a contract separate from the

maritime duties of maintenance and cure, which Royal Carib-

bean undisputedly resolved by satisfactory performance. We

thus conclude that Slavchev’s claim is "so attenuated from the

business of maritime commerce that it does not implicate the

concerns underlying admiralty and maritime jurisdiction."

Atlantic Mut. Ins. Co. v. Balfour Maclaine Int’l Ltd., 968 F.2d

196, 200 (2d Cir. 1992); see also Clinton v. Int’l Org. of Mas-

ters, Mates & Pilots of Am., Inc., 254 F.2d 370, 371-72 (9th

Cir. 1958) (action based on breaches of by-laws and constitu-

tion of an organization of seamen is not a maritime claim);

Pacific Sur. Co. v. Leatham & Smith Towing & Wrecking Co.,

151 F. 440, 441-44 (7th Cir. 1907) (surety contract insuffi-

ciently maritime even though it guaranteed performance of a

maritime contract).

In sum we hold that the land-based contract in this case,

purportedly entered into after Slavchev’s maritime service

had been completed and separate from Royal Caribbean’s tra-

8 SLAVCHEV v. ROYAL CARIBBEAN CRUISES

ditional maritime duties, which themselves had been satisfied,

was not sufficiently "salty" to support admiralty and maritime

jurisdiction. See Norfolk Southern Ry. Co. v. Kirby Pty Ltd.,

543 U.S. 14, 22 (2004).

VACATED AND REMANDED WITH INSTRUCTIONS