Appendix — Valmas Bros. Shipping, S. A. v. Fisher

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| Office Supreme Court, U.S.

FILED

80-1810 APR 28 1991

| os R'.. STEVAS,

CLE

NO. eit

IN THE

Supreme Court of the United States

OCTOBER TERM, 1980

VALMAS BROTHERS SHIPPING, S.A.

AND

VALSKY MARITIME, LTD.,

Petitioners

Vv.

JACK FISHER, ETC,

AND

EUGENIA KEPESSIDIS, Individually, Etc.,

Respondents

On Writ Of Certiorari

To The United States Court Of Appeals

For The Fifth Circuit

APPENDIX TO PETITION FOR A WRIT

OF CERTIORARI TO THE UNITED STATES

COURT OF APPEALS FOR

THE FIFTH CIRCUIT

E. D. VICKERY

ROBERT S. DE LANGE

3710 One Shell Plaza

Houston, Texas 77002

(713) 224-8380

Attorneys for Petitioners

Of Counsel:

ROYSTON, RAYZOR, VICKERY

& WILLIAMS

3710 One Shell Plaza

Houston, Texas 77002

(713) 224-8380

a see a ere ES

Alpha Law Brief Co,, One Main Plaza, No, 1 Main St,, Houston, Texas 77002

INDEX TO APPENDIX

APPENDIX 1-—Opinion of the United States Court of

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APPENDIX 2—Order on Petition For Rehearing and Dis-

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APPENDIX 3—Order of United States District Court for

the Eastern District of Texas Denying Motion To

EY EEE ov nd 06 cage vewseddssseccccices

APPENDIX 4—Findings of Fact and Conclusions of Law

GE Ee PER GAME Sie c coccccccnesesvecsesscess

APPENDIX 5—Judgment of the District Court .........

APPENDIX 6—Judgment of the United States Court of

Appeals for the Fifth Circuit .............eseeee00:

APPENDIX 7—Deposition of Christofis Valmas ........

APPENDIX 8—Exhibits to Deposition of Christofis Valmas

APPENDIX 9—Affidavit In Support of Motion to Dismiss

Sk EE bic Zb he be ceeceacecseveteuene

Page

APPENDIX 1

Jack FISHER, Personal Representative of the

Estate of Dimitrios Kepessidis,

Plaintiff-Appellee,

Vv.

The AGIOS NICOLAOS V et al.,

Defendants-Appellants.

Eugenia KEPESSIDIS, Individually, etc.,

et al., Plaintiffs-Appellees,

Vv.

The AGIOS NICOLAOS V, etc., et al.,

Defendants-Appellants.

No. 79-1103.

United States Court of Appeals,

Fifth Circuit.

Oct. 10, 1980.

Surviving widow and dependents of a Greek seaman

who was killed on a foreign vessel in an American port

brought wrongful death action under the Jones Act and

under general maritime law. The United States District

Court for the Eastern District of Texas, Joe J. Fisher, J.,

held that the Liberian corporation which owned the vessel

and the Panamanian corporation which operated the

vessel were liable, and they appealed. The Court of

Appeals, Tate, Circuit Judge, held that: (1) the trial

court properly exercised discretion when it denied a

motion to dismiss on forum non conveniens grounds;

(2) despite defendants’ strong case for the application of

Greek law, where the fatal accident occurred in an Ameri-

can port and where the seaman who was killed had

worked in that American port during his entire service

on the vessel prior to the accident and the vessel derived

substantial revenues from a substantial base of operations

in the United States, there was a sufficient nexus between

the defendants and the United States to justify application

of United States law; (3) the district court’s finding that

the vessel had a substantial base of operations in the

United States and derived substantial revenues from that

base of operations was not clearly erroneous; (4) any

error that might have been committed by the district court

in calculating damages for loss of future earnings was

harmless; and (5) the district court did not abuse dis-

cretion when it awarded prejudgment interest at a rate

of nine percent.

Affirmed.

Robert S. DeLange, Galveston, Tex., E. D. Vickery,

Houston, Tex., for defendants-appellants.

Dué, Dodson & DeGravelles, Paul H. Dué, Baton

Rouge, La., for Eugenia Kepessidis.

Appeal from the United States District Court for the

Eastern District of Texas.

Before MORGAN, CHARLES CLARK and TATE,

Circuit Judges.

TATE, Circuit Judge:

The surviving widow and dependents of a Greek sea-

man killed on a foreign vessel in an American port were

awarded damages in this wrongful death action, which

was brought under the Jones Act and general maritime

law. The defendants held liable (the shipowner Valsky,

a Liberian corporation, and the ship operator Valmas,

a Panamanian corporation) contend principally that the

district court erred (a) in failing to grant a motion for

dismissal based on forum non conveniens, (b) in apply-

ing United States rather than Greek law, and (c) by

incorrectly computing the damage award. We find no

reversible error and therefore affirm the judgment of

the district court.

FACTS

The decedent, Dimitrios Kepessidis, a citizen of Greece,

was hired in Greece as the chief engineer for the M-V

AGIOS NICOLAOS V and joined the vessel in Beau-

mont, Texas, on May 22, 1976.

The AGIOS NICOLAOS V is a Greek flag-flying and

Greek registered vessel owned by defendant, Valsky Mari-

time, Ltd. (Valsky), a Liberian corporation. It is oper-

ated by the defendant Valmas Brothers Shipping, S.A.

(Valmas), a Panamanian corporation.’ The vessel, which

had recently been purchased from a Swedish vendor, was

the only ship owned by Valsky. The AGIOS NICOLAOS

V had sailed to Beaumont (on its maiden voyage under

Valsky) without any cargo. Its first business venture (and

only one prior to the accident) was to pick up corn at

a Beaumont grain elevator and to deliver it to the Soviet

Union.

On June 1, 1976, Chief Engineer Kepessidis, who had

only nine days earlier joined the crew of the AGIOS

1. The two corporate defendants were owned and operated en-

tirely by three brothers, Nicholas Valmas, Christothis Valmas, and

Dimitris Valmas, all of whom were citizens and residents of Greece.

NICOLAOS V, had gone to help one of the crew start

the engine boilers. They were unsuccessful in three at-

tempts. On the fourth attempt, the boiler exploded, and

the decedent was burned. Despite being injured, the de-

cedent proceeded to fight the fire, but the fire extinguisher

he used was not in working order. In a further attempt

to extinguish the blaze, members of the crew turned on

the carbon dioxide system. In doing so, however, no one

took a head count, and Chief Engineer Kepessidis was

trapped in the engine room, where he suffocated from

the carbon dioxide.

[1-3] We should here note that the defendants do not

attack the district court’s findings that the decedent’s ac-

cident and death resulted from the unseaworthiness of

the vessel? and the negligence of the defendants.* While

2. The district court found that the defendants’ vessel and its

equipment were unseaworthy in that the starboard auxiliary boiler

had a defective leaking fuel valve and defective equipment, in that

the boiler was having to be operated and attempted to be ignited on

a manual basis when the equipment was designed to be automatic

but which automatic features had broken down and had not been

repaired despite reasonable opportunity for such repair, in that the

boiler was not equipped with an adequate sight glass or other safety

device to accord an operator a reasonable opportunity to inspect the

furnace for possible leaking fuel oil, in that the controls, operations

manuals, etc., were all in Swedish rather than Greek, and in that the

crew was not given proper training and instructions in the proper

and safe method to operate these automatically designed boilers in

a manual fashion. The court properly found that this unseaworthiness

proximately caused the accident resulting in the death of the late

Mr. Kepessidis.

3. The district court found: The defendants were negligent in

failing to assure that all fire extinguishers were functioning properly,

in failing to see that proper fire drill procedures occurred aboard

ship, in resorting to the Co* system when it was unnecessary ‘» do

so, and in causing the Co? system to be activated before any reason-

able steps were taken to ascertain that all engine room personnel had

reached safety. The defendants were likewise negligent in that no

attempt was made to use fire resistant clothing to reach the engine

a contention is made that the decedent’s own negligence

may have been a contributory cause, the trial court’s

finding to the contrary is far from being clearly erroneous*

so as to justify our upsetting it on review.°

ISSUES

On appeal, the defendants-appellants raise the follow-

ing principal issues: (1) Whether the trial court erred

in retaining jurisdiction of this suit (a forum non con-

veniens contention); (2) If jurisdiction were properly

retained, whether the district court erred in applying

American law rather than Greek law; and (3) Whether

room to cut off the fuel supply for the fire and to rescue any persons

located in the engine room. This negligence caused or contributed to

the death of the late Mr. Kepessidis. The defendants were also

negligent in causing or permitting the various unseaworthy conditions

as set forth to exist and in failing to provide plaintiffs’ decedent with

a safe place to work, which negligence proximately caused the acci-

dent resulting in the death of Mr. Kepessidis.

4. The defective leaking valve caused a residue of gas to build up

after each unsuccessful attempt to ignite the boiler. Relying on ex-

pert evidence that the decedent should have allowed a minute or two

to elapse (so as to allow the gas to dissipate) after each unsuccessful

attempt, the defendants contend that the decedent’s fault contributed

to the accident. We find no error in the district court finding that the

decedent could not have reasonably known of the defect so as to take

such precaution and did not act without reasonable care for his own

safety under the circumstances; as well as its conclusion that the

decedent’s relatively minor burns would not have resulted in his death,

which was due to carbon dioxide suffocation brought about by the

negligence (bordering on gross) of the defendants.

5. The district court’s findings of fact in an admiralty case are

binding unless clearly erroneous. Fed. R. Civ. Proc., Rule 52(a). In

a judge trial of an admiralty claim, questions of negligence and

proximate cause are treated as fact questions and a finding of fact

of the trial court on these issues will not be overturned on review

unless clearly erroneous. Marcona Corporation v. Oil Screw Shifty

III, 615 F.2d 206, 208 (Sth Cir. 1980), S. C. Loveland, Inc. v. East

West Towing, Inc., 608 F.2d 160, 166 (Sth Cir, 1979).

the damages were properly computed, in that (a) the

award of future loss of earnings was not discounted to

present value and (b) pre-judgment interest was improp-

erly allowed (or, alternatively, at the wrong rate).

I. Forum Non Conveniens

The defendants’ motions in the trial court did not

dispute its jurisdiction of these maritime claims, nor that

court’s discretion in determining whether the action before

it should be conditionally dismissed on forum non con-

veniens grounds that the Greek courts were a more suit-

able forum. As we apprehend their argument before us,

the ultimate contention of the defendants is that the

district court abused its discretion in not dismissing the

suit because, in their view, the court was in error under

the Lauritzen test (see text at note 7 infra) in deter-

mining that American law applied.

The fountainhead decision in determining application

of the forum non conveniens principle is Gulf Oil Cor-

poration v. Gilbert, 330 U.S. 501, 67 S.Ct. 839, 91

L.Ed. 1055 (1947), a non-maritime case. There the

Court stated that “[t]he principle of forum non conveniens

is simply that a court may resist imposition upon its

jurisdiction even when jurisdiction is authorized by the

letter of a general venue statute.” 330 U.S. at 507, 67

S.Ct. at 842. The doctrine “presupposes at least two

forums in which the defendant is amenable to process

. . . [and] furnishes criteria for choice between them.”

Id. Although “the combination and weight of factors

requisite to given results are difficult to forecast or state,”

330 U.S. at 508, 67 S.Ct. at 843, among the factors of

“private interest” listed by the Court were accessibility

of proof and witnesses, enforceability of any resulting

judgment, and the ease and expense of litigation in the

forum. Such factors allow a court to “weigh relative

advantages and obstacles to fair trial.” Jd. A trial court

should also look to “public interest” factors such as the

burden created for local court calendars and local juries

by trials having no connection with the forum. The Court

stressed that “[t]he doctrine leaves much to the discretion

of the court . . . But unless the balance is strongly in

favor of the defendant, the plaintiff’s choice of forum

should rarely be disturbed.” 7d.

In the exercise of discretion to retain jurisdiction of

maritime tort suits, the United States Supreme Court early

stated that “[t]he jurisdiction . . . will [be] exercise[d]

. .. unless special circumstances exist to show that justice

would be better subserved by declining it.” The Belgen-

land v. Jensen, 114 U.S. 355, 367, 5 S.Ct. 860, 865,

29 L.Ed. 152 (1885). In this circuit, this standard for

the exercise of this trial court discretion in resolving

forum non conveniens contentions has been reiterated

in these terms:

[T]he question is not whether an injustice will

result if the court does not exercise jurisdiction, but

whether exercising jurisdiction will result in an in-

justice . . . Under the proper standard, the court

must begin with the assumption it will exercise

jurisdiction unless it is established, by the defendant,

that an injustice would follow.

Poseidon Schiffahrt, G. M. B. H. v. The M/S Netuno,

474 F.2d 203, 205 (Sth Cir. 1973), vacating a forum

non conveniens dismissal. See also Motor Distributors,

Ltd. v. Olaf Pedersen’s Rederi A/S, 239 F.2d 463 (Sth

Cir. 1956), cert. denied, 353 U.S. 938, 77 S.Ct. 816,

1 L.Ed.2d 760. See Comment, The Convenient Forum

Abroad Revisited: A Decade of Development of the Doc-

trine of Forum Non Conveniens in International Litigation

in the Federal Courts, 17 Va. J. Int. L. 755, 764 (1977).

[4] Reviewing the district court’s exercise by this

standard of its discretion to retain jurisdiction, we find

no abuse. Even aside from the district court’s correct

determination that American law applies (which dictates

rejection of a forum non conveniens dismissal, see part

II of this opinion below), we would be unable to hold

that the trial court discretion was abused when it re-

tained jurisdiction, based upon such factors here present

as: the accident having occurred in a United States port,

with investigations having been undertaken by American

agencies (the coast guard and the local fire department)

and medical authorities; American counsel having been

retained, with substantial steps toward adjudication hav-

ing already been undertaken; the joinder with the maritime

tort claims of a bona fide wage claim arising under

American law; and the substantial issue from the onset

of the litigation as to whether American or Greek law*

applied to this accident. Thus, even if Greek maritime-

injury law (see note 6) was ultimately decided to be

applicable, we cannot say the trial court abused its dis-

cretion by retaining jurisdiction and denying a forum

non conveniens dismissal.

[5, 6] We do not find persuasive the defendants’

forum non conveniens arguments. First, they state that

6. Even if Greek law applied, a substantial showing is made by

the plaintiffs’ Greek-law expert that, in the event the death was

caused by the defendants’ gross negligence or failure to comply with

a safety regulation, the plaintiffs’ claim for maritime tort damages

would be governed by the law of the place where the tort occurred,

ie., the United States.

the trial court’s refusal to tind Lauritzen factors alone

determinative as to this issue presents an error of law

or a clearly erroneous factual determination; but they

overlook that these choice-ol-law tactors, while perhaps

relevant since American law’s application ends turther

inquiry (see Il below), are not determinative as to

forum non conveniens as Lauritzen itselt states.’ Second,

the defendants argue that the Belgenland standard tor

retaining jurisdiction (“unless special circumstances exist

to show that justice would be subserved by declining it,”

7. Lauritzen v. Larsen, 345 US. $71, 73 S.Ct. 921, 97 L.Ed.

1254 (1953). ‘The decision essentially concerned a choice o1 law issue:

Whether the American jones Act could atiord a ciaim tor persunal

injury suffered in a Cuban harbor by a Vanish seaman on a vanish

flag vessel. ‘Lhe decision attempted to list the tactors appropriate

to intiuence the choice of whetner American instead of ivreign iw

was to govern a maritime tort claim, See Part 111 of opinion velow.

‘The courts sometimes base the application or not of a torum non

conveniens dismussal of a seaman’s suit on Lauritzen iactors. dee,

€.g., Anastassaass v. S. S, Litue Jonn, 346 &.2d 281 (Sth Cir, 1905).

However, the Lauritzen court itself recognized that the torum non

conveniens factor of the inaccessivility of a toreign forum “muignt be

a persuasive argument for exercising discretionary jurisdicuon to

juage a controversy”, but that the choice of law issue involved differ-

ent considerations. 345 U.S. at 589-90, 73 S.Ct. at 932. ‘he court

in Alegria v. Grand Bassa Tankers, Inc., 337 F.Supp. 401 (S.D. N.Y.

1971) correctly summarized the question thusly: “The doctrine of

forum non conveniens should not be applied to the instant cases.

Defendants, in relying upon Lauritzen v. Larsen . . . and its progeny,

have misconceized the holding in that case which dealt with the

‘factors which . . . are generally conceded to influence choice of law

. . . We are not dealing here with choice of law but with a choice of

forum, and Gulf Oil Corporation v. Gilbert . . . is the applicable

authority rather than Lauritzen v, Larsen.” Id, at 403. See aiso The

Fletero v. Arias, 206 F.2d 267 (4th Cir. 1953), which recognized that

the Belgenland forum non conveniens discretion applies to a seaman’s

suit for maritime injuries, although Lauritzen applies as to the dis-

tinctly separate choice of law (Jones Act) issue.

The chief relevance of the Lauritzen factors to a forum non con-

veniens decision is that if the choice is American law, it would rarely

if ever, be appropriate to relegate the foreign seaman to a foreign

forum, see II, infra, and no decision has been found so doing.

114 US. at 367, 5 S.Ct. at 865) applies only to col-

lisions between foreign vessels and not to suits by a

foreign seaman against a foreign vessel or owner’—a dis-

tinction for which no citation is offered, which has never

been noted in the doctrinal literature,’ and which has

been ignored in decisions retaining jurisdiction over suits

by foreign seamen against foreign ship parties.’

{7] An appellate court reverses the decision of a dis-

trict court on a motion to dismiss on forum non con-

8. The defendants rely upon the court's statement in Belgenland

that “the case of foreign seamen is undoubtedly a special one when

they sue for wages under a contract which is generaily strict in its

character and framed according to the laws of the country to which

the ship belongs; framed, also, with a view to secure, in accordance

with those laws, the rights and interests of the shipowners as weil as

those of master and crew, as well when the ship is aboard as when

she is at home. Nor is this special character of the case enurely

absent when foreign seamen sue the master of their ship tor ill-

treatment. On general principles of comity, admiralty courts of other

countries will not interfere between the parties in such cases unless

there is special reason for doing so... .” 114 U.S. at 364, 5 S.Ct.

at 864. In context, the statement referred to situations where foreign

law (then) clearly applied, as compared with the general maritime

law found to be applicable in Belgenland (and thus a reason for

retaining jurisdiction). When the law of a non-American forum clearly

applies, this is of course a relevant factor for the application or not

of forum non conveniens principles. The defendants’ argument really

addresses itself to the issue of whether the district court was correct

in holding that the American law rather than Greek law applied.

9. Pickel, The Doctrine of Forum Non Conveniens as Applied in

the Federal Courts in Matters of Admiralty, 35 Cornell L.Q. 12

(1949); Morrison, The Foreign Seaman and the Jones Act, 8 Miami

L.Rev. 16, 17-18 (1953); Comment, A New Look at Lauritzen v.

Larsen, Choice of Law and Forum Non Conveniens, 38 La.L.Rev.

957 (1978); Note, The Convenient Forum Abroad Revisited, 17

Va.J.Int.L. 755, 764-66 (1977).

10. See, e.g., Conte v. Flota Mercante del Estado, 277 F.2d 664

(2nd Cir. 1960) (Argentine law applied); The Fletero v. Arias, 206

F.2d 267 (4th Cir. 1956) (Argentine law applicable); Heredia v.

Davies, 12 F.2d 500 (4th Cir. 1926).

veniens if it constitutes a clear abv»: of discretion.

Fitzgerald v. Texaco, Inc., 521 F.2d 4 -8, 451 (2nd Cir.

1975), cert. denied, 423 U.S. 1052, 96 S.Ct. 781, 46

L.Ed.2d 641 (1976); Paper Operations Consultants In-

ternational, Ltd. v. S. S. Hong Kong Amber, 513 F.2d

667, 670 (9th Cir. 1975); The Kanto Maru, 112 F.2d

564, 565 (9th Cir. 1940). Having found no such abuse,

we affirm the district court’s retention of jurisdiction.

II. Choice of Law as a Factor in Forum

Non Conveniens Decision

The defendants have argued their forum non conveniens

contentions on the basis of choice of law considerations,

as if the latter supplied an interchangeable test for both

issues. Some observations about the interplay of forum

non conveniens and choice of law considerations might

therefore be appropriate.

Lauritzen v. Larsen (discussed in III infra) is the

fountainhead decision in determining choice of law prin-

ciples to govern suits brought in American courts by

foreign seamen against foreign shipping interests. Lau-

ritzen, in reversing the lower courts’ determination that

the American Jones Act rather than a foreign compensa-

tion law governed, indicated that a forum non conveniens

consideration was not relevant in the determination of

the choice of law, even though it “might be a persuasive

argument for exercising discretionary jurisdiction to judge

a controversy.” 345 U.S. at 589-90, 73 S.Ct. 932.

[8] To the contrary, however, choice of law factors

are relevant in the determination of a forum non con-

veniens issue. This is so, because one of the factors

favoring non-retention of jurisdiction is the application

of foreign law to the controversy, which is less convenient

for American courts to apply than it is for the courts

of that foreign country. Gulf Oil Co. v. Gilbert, 330

U.S. 501, 509, 67 S.Ct. 839, 843, 91 L.Ed. 1055

(1947); DeMateos v. Texaco, Inc., 562 F.2d 895 (3rd

Cir. 1977).

[9-11] Thus, where by application of the Lauritzen

factors the correct choice of law decision is to apply

foreign law (and a foreign forum is accessible), a district

court’s discretion in granting a forum non conveniens

dismissal will not ordinarily be disturbed on review. De-

Mateos v. Texaco Inc., supra; Anastasiadis v. S. §. Little

John, 346 F.2d 281, 284 (Sth Cir. 1965); but see Gkiafis

v. Steamship Yiosonas, 387 F.2d 460 (4th Cir. 1967).

On the other hand, despite the choice of a foreign law as

applicable, the district court’s rejection of a forum non

conveniens plea and its retention of jurisdiction will not

be disturbed on review in the absence of a clear abuse

of its discretion in the matter. See decisions cited at note

10 supra. Thus, once it is determined that foreign law

clearly applies, it is then appropriate to apply forum non

conveniens standards in determining whether to retain

jurisdiction acquired over a maritime suit with foreign

factors. DeMateos v. Texaco, Inc., supra.

[12] However, for similar forum non conveniens rea-

sons, if United States law is applicable, the American

court should retain jurisdiction rather than relegate the

controversy to a foreign tribunal. Thus, for instance, in

Antypas v. Cia. Maritima San Basilio, §.A., 541 F.2d

307 (2nd Cir. 1976), the Second Circuit found that

“[w]here the Jones Act applies, . . . a district court

has no power to dismiss on grounds of forum non con-

veniens.” Id, at 310. See Bartholomew vy. Universe Tank-

ships, Inc., 263 F.2d 437, 443 (2nd Cir.), cert. denied,

359 U.S. 1000, 79 S.Ct. 1138, 3 L.Ed.2d 1030 (1959);

Mattes v. National Hellenic American Line, S.A., 427

F. Supp. 619, 629 (S.D.N.Y. 1977). Because the con-

sequences of a decision that American law applies are

so conclusive on the issue, it has in fact been suggested

that the initial inquiry in determining a forum non con-

veniens issue in a maritime case should be centered

around the choice of law question.”

Ill. Choice of Law: American or Greek?

The choice of law issue is posed as follows: The plain-

tiffs contend that the American Jones Act and general

maritime law as administered by United States courts

furnish the substantive rules for determining liability and

damages. The defendants contend that Greek law, fur-

nishing a workmen’s compensation type remedy, is in-

11. Comment, A New Look at Lauritzen v. Larsen, Choice of Law

and Forum Non Conveniens, 38 La.L.Rev. 957, 958 (19/8):

The mere fact that a suitor is a foreign seaman aoes not bring

into play the doctrine of forum non conveniens, Foreign seamen s

suits broadly fall into two categories: those which invoive a

cause of action based on the laws of the United States and those

which do not, Forum non conveniens as applied to toreign sea-

men is properly concerned only with the iatter class o1 Cases,

those in which a foreign seaman has no cause of action based

on the laws of the United States. When a foreign seaman has a

cause of action based on the laws of the United States the sea-

man comes by right into the courts and the retention of his suit

based on domestic law should be mandatory. Retention of the

suit is not discretionary, because once the scope of United States

law has been defined the judiciary is not free to adjudicate

selectively the effects of the law. Therefore, the object of judicial

inquiry at the outset of a foreign seaman’s suit is to determine

the applicable law, and only if United States law is found not

to govern the suit should the appropriateness of the United

States forum be examined,

stead applicable. The plaintiffs alternatively contend that,

if Greek law does furnish the rule of decision, then un-

der the present circumstances of the defendants’ gross

negligence, the law of Greece would allow an action, up-

on the maritime tort, in which the determination of the

substantive issues is decided in accordance with the law

of the place of the tort (i.e., the United States, and its

Jones Act and the maritime law as administered by its

courts ).

When a foreign seaman brings suit against a foreign

vessel or foreign shipping defendants, the factors to be

examined in determining a choice of whether United

States or some foreign law applies, have been set out by

the United States Supreme Court in the Lauritzen-Romero-

Rhoditis trilogy: Hellenic Lines, Ltd. v. Rhoditis, 398

U.S. 306, 90 S.Ct. 1731, 26 L.Ed.2d 252 (1970);

Romero v. International Terminal Operating Company,

358 U.S. 354, 79 S.Ct. 468, 3 L.Ed.2d 368 (1959);

Lauritzen v. Larsen, 345 U.S. 571, 73 S.Ct. 921, 97

L.Ed. 1254 (1953).

Lauritzen set out seven connecting factors generally

regarded as significant, to be listed below, and in the case

before it held that the overwhelming preponderance of

these factors favored application of the foreign law, thus

rejecting the application of the American Jones Act

sought by the plaintiffs. Romero held that the Lauritzen

factors applied to the determination of whether “the mari-

time law of the United States” may be applied, 358 U.S.

at 381, 79 S.Ct. at 485, as well as to whether the Jones

Act might be applied. Rhoditis, the latest of these deci-

sions, expanded on the Lauritzen test by stating that its

list of seven factors “was not intended as exhaustive” and

that the test was “not a mechanical one.” 398 U.S. at

308-09, 90 S.Ct. at 1734. In holding the Jones Act to be

applicable, the court noted that to effectuate the liberal

purposes of the Jones Act the “real nature of the opera-

tion” and “the actual operational contacts that this ship

and this owner have with the United States” must be con-

sidered 398 U.S. at 310, 90 S.Ct. at 1734-35. The

Rhoditis gloss on the Lauritzen tests indicate that the

appropriate application of United States law to the foreign

seaman’s suit depended on the substantiality of the con-

tacts with the United States of the foreign defendant in-

volved in the transaction. Lauritzen noted seven factors

as significant for consideration: (1) Place of wrongful

act; (2) Law of the flag; (3) Allegiance or domicile of

the injured; (4) Allegiance of defendant shipowner; (5)

Place of the contract; (6) Inaccessibility of foreign for-

um; and (7) Law of the forum. Rhoditis noted an

eighth factor of importance,”* the shipowner’s “place of

operations” indicating that otherwise an alien owner with

substantial business operations in this country might, by

escaping his obligations as a Jones Act “employer”, be

unfairly advantaged over citizens of this country engaged

in the same business. 398 U.S. at 309, 90 S.Ct. 1734.

[13] The defendants make an extremely strong case

for application of Greek law. They point out that the ship

flew a Greek flag and had Greek registry, that the de-

ceased seaman was of Greek nationality and had signed

12. In Rhoditis a suit under the Jones Act was brought, as here,

by a Greek seaman injured in a United States port aboard a Greek

flag vessel owned by a Greek corporation. Under the Lauritzen test,

four factors favored the defendant shipowner and against the reten-

tion of jurisdiction. Yet, since it was determined that the defendant

had a substantial base of operations in the United States, the court

decided that United States law should apply, despite the fact that

the factors delineated in Lauritzen would suggest otherwise.

his employment contract in Greece,’* and that the law

of the American forum should not be applied simply be-

cause the accident occurred in an American port. They

also point out that the defendants, although a Liberian

corporation (the owner) and a Panamanian corporation

(the operator), were owned entirely by three Greek share-

holders."* They rely additionally upon the circumstance

that the decedent’s survivors had a remedy (in the nature

of workmen’s compensation, as in Lauritzen) available to

them in the Greek courts.’®

[14] The district court held, however, that it was in-

stead appropriate to apply United States law to the con-

sequences of this accident in an American port, to which

a seaman had flown to join the vessel, and in which he

had worked during his entire service on the vessel prior

13. The contract also included a provision that Greek law and

Greek courts would exclusively determine rights under the employ-

ment contract including claims on account of illness or accident. A

similar agreement was disregarded as of little relevance in Rhoditis,

in its determination that the American Jones Act afforded a remedy

to a Greek seaman under circumstances similar to the present.

Probably due to the disparity in bargaining power between the sea-

man and his employer, American courts have generally accorded

little determinative weight to such contractual choice of law provi-

~ 5) Gilmore and C. Black, The Law of Admiralty 476 (2d

. 1975).

14. The plaintiffs argue that the Liberian and Panamanian incor-

porations by the Greek nationals, presumably adopted to avoid ap-

plication of some Greek laws, should not be selectively disregarded

at the option of the defendant corporation, solely urged to require

the application of Greek law and to defeat the application of Ameri-

can law to the plaintiffs’ claim.

15. In arguing that a Greek forum is not accessible, the plaintiffs

rely upon expert evidence to the effect that, under Greek law, the

domicile of the corporations (not of the stockholders) (see note 14

supra) determines personal jurisdiction, and that an agreement be-

tween parties to confer jurisdiction on Greek courts (see note 13

supra) is not enforceable in Greece.

to the fatal accident there. In rejecting the defendants’

substantial contention that Greek law should be applic-

able, the district court primarily relied upon as a deter-

minative factor that, prior to the accident,’® the vessel’s

entire service under its present ownership, and its entire

revenues therefore to be earned, arose from a base of op-

erations in the United States. Under the Rhoditis gloss

on Lauritzen factors, this substantial use of a United

States base of operations for the shipping and revenues of

the vessel and its owner, together with the other United

States contacts (the latter of which may not by them-

selves have been sufficient for the purpose), justified the

choice of the Jones Act and of general maritime law as

administered by American courts as a more appropriate

basis for decision than the Greek compensation law.

Rhoditis, supra, 398 U.S. 308, 90 S.Ct. at 1733 (entire

income derived from cargo going to or coming from the

United States); Antypas v. Cia. Maritima San Basilio,

S.A., 541 F.2d 307, 309-310 (2nd Cir. 1976) (most

voyages to or from United States ports); Moncada v.

Lemuria Shipping Corp., 491 F.2d 470, 473 (2nd Cir.),

cert. denied, 417 U.S. 947, 94 S.Ct. 3072, 41 L.Ed.2d

667 (1974) (40% of its voyages were either to or from

American ports); Mattes v. National Hellenic Am. Line,

S.A., 427 F. Supp. at 619, 624 (S.D.N.Y. 1977) (most

16. From external manifestations as of the time of the accident,

the vessel had been purchased primarily to service the American grain

trade. The defendants argue that the vessel’s post accident use belied

extensive service to and from American courts. However, we agree

with the plaintiffs that the post-accident use of a foreign vessel pre-

viously used entirely in America should not be determinative as to

the application or not of American law. But for the accident(s) in

an American harbor causing large exposure to damages under Ameri-

can law, the plaintiffs ask, who is to say that the owner and operator

might have continued to have the vessel ply to and from American

ports in the profitable carriage of American grain cargos?

voyages either originated or terminated in United States

ports Pag

We thus do not find merit to the defendants’ argument

that the district court erred in its conclusion of /aw that

United States law may apply to this foreign seaman’s ac-

cident in a United States port, where the vessel had a sub-

stantial base of operations in the United States and its

owners derived substantial revenues from United States

trade. Under Rhoditis and subsequent jurisprudence,

there was a sufficient nexus between the defendants and

this country so as to justify the application of United

States law.

[15] The defendants’ contention, then, is rather that

the district court was clearly erroneous in its factual find-

ing that the vessel had a substantial United States base

of operations and thereby derived substantial revenues.

See its conclusions of law III and XII (making III a con-

clusion of fact also). The district court’s determination

that a shipowner has or has not a substantial base of

operations in the United States is a factual finding that

should not be disturoed on review unless clearly erron-

eous. Fitzgerald v. Liberian S/T Chryssi P. Goulandris,

582 F.2d 312, 315 (4th Cir. 1978). “A finding is ‘clearly

erroneous’ when although there is evidence to support it,

17. Here, under the findings, substantial revenues were derived

from a substantial base of operations in the United States. We do not,

of course, intimate that doing any amount of business in a U.S. port,

however miior, is alone sufficient to establish a “substantial base of

operations.” See Romero, supra; Manlugon v. A/S Facto, 419 F.Supp.

550 (S.D. N.Y. 1976); Rodriguez v. Orion Schiffahrts-Gesellschajt

Reith & Co., 348 F.Supp. 777 (S.D. N.Y. 1972). Furthermore, the

place of the wrongful act alone being in the United States is an

insufficient factor upon which to base retention of jurisdiction. See

Yohanes v. Ayers Steamship Co., 451 F.2d 349 (Sth Cir. 1971);

Koupetoris v. Konkar Intrepid Corp., 402 F.Supp. 951 (S.D. N.Y.

1975).

the reviewing court on the entire evidence is left with

the definite and firm conviction that a mistake has been

committed.” U.S. v. U.S. Gypsum Co., 333 U.S. 364,

395, 68 S.Ct. 525, 542, 92 L.Ed. 746 (1948); Dresser

Industries v. Fidelity & Cas. Co. of N. Y., 580 F.2d 806,

807 (Sth Cir. 1978).

[16] So tested, we cannot find reversible error. The

AGIOS NICOLAOS V had proceeded directly to a

United States harbor from Spain upon its purchase by the

defendant Valsky, the only vessel owned by that corpora-

tion.’* After its purchase, the vessel proceeded without a

cargo directly to a United States port for the purpose

of carrying a cargo of American grain to Russia, and the

trial court might reasonably have found that it had been

purchased for the purpose of such trade. Its entire busi-

ness activity prior to the accident had been in the United

States. The decisions relied upon by the appellant are

factually distinguishable as involving less substantial

United States operations and contacts in the operation

of the vessel.

Since we have found no error in the district court’s

conclusion United States law applies, we need not reach

the plaintiffs’ alternative contention: Even if American

law were not applicable under the Lauritzen-Rhoditis

tests, the Greek law—if applicable to the present accident

—would still require a determination by reference to

American law. In making this contention, the plaintiffs

18. The plaintiffs additionally rely in brief upon the purchase of

the vessel having been financed through a United States bank branch.

See Gomez v. Karavias, 401 F.Supp. 104, 107 (S.D. N.Y. 1975). The

defendants do not in brief contest this finding, but the full deposition

to which record citation is made is not in the appellate record. The

excerpts from this deposition furnished for the record by the defend-

ants are ambiguous as to this contention.

rely upon the testimony of an expert witness relative to

Greek law. He testified that, in circumstances of either

gross negligence or of a breach of safety regulations

causing injury (as plaintiffs state is here present, see fac-

tual summary in footnotes 2 and 3 supra), a Greek sea-

man injured in a foreign port on a Greek vessel has a tort

action under Greek law that is governed by the place of

the tort (i.e., here, the American harbor).

IV. Computation of Damages

[17] Finally, the defendants contend that, at any rate,

the district court erred (a) in its failure to discount future

earnings to present value and (b) with regard to pre-

judgment interest allowed on the entire record. However,

we ultimately hold that any errors in calculation are

harmless (if erroneous), because in clear error the district

court likewise computed earnings at 750 dollars instead

of at 750 British pounds (worth $1,350) per month. Any

erroneous allowance was thus cancelled out (see IV(c)

infra) by the diminution in the awarded damages result-

ing from this erroneous calculation based on dollars

instead of pounds. International Paper Company v.

Busby, 182 F.2d 790, 793 (Sth Cir. 1950).

(a) Failure to discount future earnings

The district court awarded $108,800 to the decedent’s

widow and child. Of this amount, $13,750 is for loss of

contributions prior to judgment, and $95,050 for future

loss of contributions.’®

19. The decedent’s annual salary was found by the district court

to be $9,000. Of this amount, $3,000 was the amount found that

decedent would spend for his own needs, $500 for his parents, and

the remaining amount ($5,500) for his widow and child. The award

was based on decedent’s life expectancy of 19.8 years.

In refusing to discount to present value the decedent’s

loss of future earnings, Johnson v. Penrod Drilling Com-

pany, 510 F.2d 234, 237 (Sth Cir. 1975) (en banc), the

district court specifically found that “the future earnings

discounted would not more than equal the increase in

earnings that the deceased in all probability would have

received in the future had he lived and worked his full

remaining worklife.”

The defendant contends that discount for such reason

is not permissible unless the record contains evidence

that such future increase in earnings would most probably

have been granted in recognition of performance and

experience, rather than upon Johnson—prohibited in-

flationary factors alone. Higginbotham v. Mobil Oil Cor-

poration, 545 F.2d 422, 434-35 (Sth Cir. 1977). In

countering this contention, the plaintiffs rely upon depo-

sition testimony considering the decedent’s superiority as

a worker, his steady advancement over the years, his

attending school in 1975 to receive specialized training

for purposes of even further advancement in his pro-

fession as chief engineer, and the increase in his salary

as a chief engineer of over 25% in the last five years of

his life. The defendants contend, however, that it is not

ascertainable from this evidence the extent to which cost-

of-living increases, rather than the individual’s own per-

formance and experience had contributed, to the more

recent increases in the salaries paid him. Because of an

error in calculation undercompensating the plaintiffs, we

find the error (if any) harmless. See IV(c) infra. We

therefore need not resolve this issue.

(b) Prejudgment interest

{18] (1) the defendants correctly point out an error

in the calculation of the district court’s award. Prejudg-

ment inierest was allowed on a loss of future earnings

awarded (as to which, of course, no loss by delay in

paying had been caused at the time of judgment). Doucet

v. Wheless Drilling Co., 467 F.2d 336, 339 n.2 (Sth Cir.

1972); Petition of the City of New York, 332 F.2d 1006

(2nd Cir. 1964); Hamilton v. Canal Barge Company,

Inc., 395 F.Supp. 978, 992 (E.D. La. 1975). Neverthe-

less, in view of an error in calculation to the prejudice

of the plaintiff, this error is harmless. See IV(c) below.

[19] (2) The defendants also argue that the appropri-

ate annual rate of prejudgment interest in Texas is 6%

instead of the 9% awarded. Pretermitting the issue of

the district court’s admiralty discretion to allow under

some circumstances a greater rate than the statutory rate

prevalent in the state, In re Vulcan, 553 F.2d 489 (Sth

Cir. 1977), another panel of this court has recently, after

examination of the conflicting Texas authorities, con-

cluded that the trial court did not abuse its dicretion in

awarding 9% prejudgment interest as appropriate under

state law in a non-admiralty claim. Dallas-Fort Worth

Regional Airport Board v. Combustion Equipment Asso-

ciates, Inc., 623 F.2d 1032, 1040-1042 (Sth Cir. 1980)

(syllabus 14). We find no abuse of discretion here.

In its finding of fact, the district court stated that the

decedent was paid “a monthly wage of $750 and a yearly

wage of $9,000,” and calculated the decedent’s loss of

earnings on this basis. However, the use of the dollar

figure for monthly wages was clearly erroneous, since the

uncontradicted testimony shows that the decedent was

paid in British pounds at a rate of 750 pounds per month,

see Exhibit P-2 and Transcript of evidence II, pp. 54,

105, cf. Astifidis dep. p. 48, and that at the applicable

time the exchange rate was 1.8176 dollars to the pound,

Tr. II, p. 57 or approximately $1,350 per month or

$16,200 annually.”

If the computation of earnings loss had been correctly

calculated on the basis of British pounds instead of

dollars, the amounts actually awarded by the district

court would have closely approximated the amounts that

the plaintiffs were entitled to be awarded on the basis

of the district court’s findings. See Appendix attached

to this opinion, which sets forth the detailed computations.

The district court’s errors in calculation therefore can-

celled out any prejudice claimed by the defendants, since

the plaintiffs were undercompensated to the same extent,

and the errors, if any, are harmless. See /nternational

Paper Company v. Busby, 182 F.2d 790, 793 (Sth Cir.

1950).

Conclusion

For the reasons set forth above, we AFFIRM the

district court judgment.

20. In calculating earnings on a twelve month basis, the district

court rejected the defendants’ argument that a lesser work year of

7.6 months per year should be allowed. The argument was based upon

the decedent’s average work-year during the five years prior to his

death. The evidence shows, however, that the decedent had gone to

school to become a diesel chief engineer for a part of those five years,

Astifidis dep. pp. 24, 25, 39; that in that interval he had worked

continuously for 14 months and 14 days, Jd. at pp. 20, 21; and that

Greek seamen receive annual bonuses totalling approximately 2%

months salary. Tr., II, pp. 106-108.

APPENDIX

The trial court computed the loss of contributions based

on decedent’s salary of $750 per month. However, the

testimony clearly established that the decedent’s monthly

income was 750 British pounds. (Expert testimony es-

tablished that the applicable exchange rate was 1.8176

dollars to the British Pound Sterling. )

In using the $750 a month figure, the trial court cal-

culated decedent’s yearly income at $9,000. Finding that

decedent would spend approximately one-third on him-

self, the court found the remaining $6,000 would be

spent by decedent for the benefit of his wife and child,

in the yearly amount of $5,500, and his parents, in the

yearly amount of $500. (The amount to his parents—

total of $5,000 to each—appears to have already been

discounted to present value.)

Based on the widow and child receiving $5,500 yearly,

the court multiplied this figure by the life expectancy of

the deceased. The total loss of contribution to the widow

and child was found to be approximately $108,800. The

trial court then granted prejudgment interest on the entire

amount at 9% for 2.5 years (time between death and

judgment) and failed to discount it. Therefore, the ulti-

mate award (including prejudgment interest) for loss of

contributions totaled $133,280. The trial court failed to

discount any portion of this award.

As stated in the body of the opinion, the trial court

erred in granting prejudgment interest on future earnings

awarded, as well as possibly by failing to discount to

present value that portion attributable to future loss of

support. Nevertheless, when the damages aie properly

recalculated by computing the decedent’s monthly salary

at 750 British pounds, the trial court’s computation, if

erroneous in these regards, was harmless,

At 750 pounds per month, decedent’s monthly salary

was approximately $1,350. Decedent’s yearly salary, there-

fore, would be $16,200. Of this amount, decedent would

under the district court’s findings use one-third ($5,400)

yearly for himself, $500 per year for his parents, and

the remaining $10,300 for his widow and child.

Accepting the defendants’ allocation as appropriate for

discount computation, the decedent’s life expectancy will

be attributed as follows: 2.8 years from death to date

of judgment and 17.0 years post-judgment.

The loss of contribution to his widow and child prior

to date of judgment, then, is $28,840 (2.8 x $10,300).

Prejudgment interest at 9% should be allowed on this

amount. The interest on this is rounded to $2,596. Hence,

prejudgment loss of contributions should have been cal-

culated by the trial court to be $31,436, including in-

terest.

Accepting the defendants’ contention that discount was

appropriate, post-judgment loss of contribution should

have been calculated as follows: $10,300 per year X

17 years, discounted to present value at 712% (the then

prevailing rate in the community for federally issued

certificates of deposit). The post-judgment loss of con-

tribution would be $97,170. See Gushee, Financial Com-

pound Interest & Annuity Tables, 1942. Thus, the total

loss of contributions to widow and child, utilizing a 712%

discount value, was $128,606.

However, the trial court stated that, if it did discount

to present value (as it ultimately did not), it would use

a 6% interest rate. Tr. Ill, p. 445. If such a discount

rate were used, the total (discounted) loss of contribu-

tions to the decedent and the widow would be as follows:

prejudgment, $31,436; post-judgment, $107,913; total,

$138,349. See Gushee, supra.

In conclusion the trial court actually awarded the

widow and child, for loss of contributions, the amount

of $133,280 (including prejudgment interest), based up-

on its erroneous use of a monthly salary for the seaman

of 750 dollars instead of 750 British pounds (i. e.,

$1,350 monthly). If the amount were recomputed cor-

rectly by using the decedent’s accurate monthly income

(750 British pounds, i. e., $1,350), the trial court award

would be between $128,606 (discounted at the 742%

contended for by the defendants) and $139,349 (dis-

counted at 6%, the rate held to be proper by the trial

court, if any discount were allowable).

Accordingly, the error of the district court in the

computation of damages was harmless error.

AFFIRMED.

APPENDIX 2

Jack FISHER, etc., Plaintiff-Appellee,

The AGIOS NICOLAOS \V, et al.,

Defendants-Appeliants.

Eugenia KEPESSIDIS, Individually, etc., et al.,

Plaintiffs-Appellees,

The AGIOS NICOLAOS V, etc., et al.,

Defendants-Appellants.

No. 79-1103.

UNITED STATES COURT OF APPEALS,

Fifth Circuit.

Jan. 28, 1981.

Appeal from the United States District Court for the

Eastern District of Texas; Joe J. Fisher, Judge.

Robert S. DeLange, Galveston, Tex., E. D. Vickery,

Houston, Tex., for defendants-appellants.

Paul H. Due, Baton Rouge, La., for Eugenia Kepessidis.

ON PETITION FOR REHEARING AND PETITION

FOR REHEARING EN BANC

(Opinion October 10, 1980, 5 Cir., 1980, 628 F.2d 308).

Before MORGAN, CHARLES CLARK and TATE,

Circuit Judges.

PER CURIAM:

The Petition for Rehearing is DENIED and the Court

having been polled at the request of one of the members

of the Court and a majority of the Circuit Judges who

are in regular active service not having voted in favor

of it, (Rule 35 Federal Rules of Appellate Procedure;

Local Fifth Circuit Rule 16) the Petition for Rehearing

En Banc is DENIED.

Before COLEMAN, Chief Judge, BROWN, AINS-

WORTH, GODBOLD, CHARLES CLARK, RONEY,

GEE, TJOFLAT, HILL, FAY, RUBIN, VANCE, KRA-

VITCH, FRANK M. JOHNSON, Jr., GARZA, HEN-

DERSON, REAVLEY, POLITZ, HATCHETT, ANDER-

SON, RANDALL, TATE, SAM D. JOHNSON, THOM-

AS A. CLARK and WILLIAMS, Circuit Judges.

JOHN R. BROWN, Circuit Judge, with whom AINS-

WORTH, GEE, TJOFLAT, VANCE, GARZA, AND

RANDALL, Circuit Judges, join dissenting:

I must dissent from the Court’s refusal to rehear this

case en banc. Left to stand, the opinion-decision opens

the 19 District Courts of the six maritime states of this

Circuit and, by precedent, all of the federal and state

courts of the nation to injury/death claims by foreign

crew members against their foreign flag employers for

recovery under American statutory (Jones Act) or gen-

eral maritime law. All that is required to trigger this

new burden on beleaguered federal courts is the presence

of the foreign flag vessel to pick up cargo on the ship’s

sole voyage to an American port. There need be no

American direction, control or operation, nor the presence

of foreign nationals as domiciliaries running things from

an American base.

In more austere terms I believe that the panel’s opinion

is contrary to law of this Circuit and of the Supreme

Court. I am particularly concerned with that portion of

the panel’s opinion concerning the choice of American

law. The choice of law question is a significant one in

and of itself, and, perhaps even more so, because as the

panel concedes “law factors are relevant in the deter-

mination of a forum non conveniens issue.” Fisher v.

Agios Nicoloas V, 628 F.2d 308, 315 (5th Cir. 1980).

The significant facts of this case, for choice of law

purposes, are not in dispute. The decedent was a citizen

of Greece. Jd. at 316. The vessel flies a Greek flag and

is registered in Greece. Jd. The two corporate defendants

which own (Liberian) and operate (Panamanian) the

vessel are themselves owned and operated by three broth-

ers, ali of whom are resident citizens of Greece. Jd. at

311, n.1. The decedent signed his employment contract

in Greece. Jd. at 316. The only thing /aerican is the

fortuitous circumstance that the fatal injuries took place

in Beaumont, Texas.

The only two factors which under Lauritzen v. Larsen,

345 U.S. 571, 73 S.Ct. 921, 97 L.Ed. 1254 (1953)

might suggest the application of American law are the

fact that the accident occurred in American waters and

that the forum chosen is American.* However, neither

of these factors have been accorded particular weight in

choice of law determinations.* The additional factor

1. Without extended discussion I disagree also with the panel

decision on forum non conveniens.

2. The panel did not pass on plaintiffs’ argument as to the inac-

cessibility of Greece as a forum. 628 F.2d at 317, n.14, 15.

3. For insignificance of place of injury as a Lauritzen factor, see

Lauritzen, 345 U.S. at 583, 73 S.Ct. at 928; Koupetoris v. Konkar

cited by the panel that the decedent joined the vessel in

the United States has similarly been accorded little

weight.‘

There is no doubt that under a strict Lauritzen analysis,

foreign law would apply. However, relying on Hellenic

Lines v. Rhoditis, 398 U.S. 306, 90 S.Ct. 1731, 26

L.Ed.2d 252 (1970), the panel supports the finding of

the District Court that defendants had a substantial base

of operations in the United States and, accordingly, that

American law should apply. The panel’s reliance on

Rhoditis is misplaced, first, because I believe that some

of the findings of the panel with respect to defendants’

purported “base of operations” in the United States

simply have no support in the record, and second, and

much more significant for purposes of en banc con-

sideration, because I am convinced that the panel’s

opinion misinterprets the holding of Rhoditis and applies

a legal standard contrary to the law of this Circuit.

As found by the panel, the vessel here had sailed on

its maiden voyage under the ownership and operation

of defendants to Beaumont, Texas to load a cargo of

corn for delivery to the Soviet Union. 628 F.2d at 311.

Although this was the first, and only, business venture

of the vessel, under ownership of defendants, at a United

States port prior to the time of the accident, the panel

supports the District Court’s conclusory finding that de-

Intrepid Corp., 535 F.2d 1392, 1396 (2d Cir. 1976); Moncada v.

Lemuria Shipping Corp., 491 F.2d 470, 472-73 (2d Cir. 1974). For

insignificance of law of forum as a Lauritzen factor, see Lauritzen,

345 U.S. at 591-92, 73 S.Ct. at 932-933; Rainbow Line, Inc. v. M/V

Tequila, 480 F.2d 1024, 1026 (2d Cir. 1973).

4. Although the Plaintiff in Lauritzen joined the crew of the vessel

in New York, the Court found this factor to be of little significance.

345 US. at 587, 73 S.Ct. at 930.

‘fendants had a substantial base of operations in the

United States observing that

The District Court primarily relied upon as a deter-

minative factor that, prior to the accident, the ves-

sel’s entire service under its present ownership, and

its entire revenues therefore to be earned, arose from

a base of operations in the United States.

Id, at 317. While this may be true as a naked proposition,

the same could be said for any vessel coming into a

United States port on its maiden voyage for purposes

of taking on cargo. And if that reasoning is valid here

it would mean that every injury/death to a foreign sea-

man occurring in a United States port on the vessel’s

first voyage to this Country would invoke American law

—Jones Act or General Maritime.

The panel goes on to state in a footnote that “[f]rom

external manifestations as of the time of the accident,

the vessel had been purchased primarily to service the

American grain trade.” /d., n.16. The District Court

made no such finding and I have been unable to uncover

‘any evidence in the record to support such a finding.

This is a remarkable “finding’ considering the minimum

life expectancy of twenty years for a modern ship and

that the mission for the vessel is to be determined by the

nature of the first voyage and cargo. The only other

factor relied upon by the panel to support its substantial

base of operations finding’ is the fact that the vessel

5. The panel also points out in note 18, 628 F.2d at 318, that

plaintiffs rely in brief upon the purchase of the vessel having been

financed through a United States bank branch. However, the panel

does not appear to rely upon this contention, finding that the record

is ambiguous on this point. At any rate, the mere financing by Ameri-

can sources of a foreign vessel has been held of little significance in

a Rhoditis analysis. Zoriano Sanchez v. Caribbean Carriers Ltd., 552

F.2d 70, 73 (2d Cir. 1977).

in question was the only vessel owned by the defendant

shipowner.

It is significant that neither the District Court nor the

panel made any finding to the effect that defendant cor-

porations or any individuals having anything to do with

their direction and control had their principal—or indeed,

any—place of business in the United States. Nor was

there any finding that the expenses of the vessel were

paid in the United States, or that the actual management

of the vessel was from a United States office, or that any

of the stockholders of the defendants were United States

citizens or residents. Indeed, no finding was even made

that defendants maintained any offices in the United States

or were even affiliated with any organization that had

offices or operations in the United States.

Although I am disturbed by what I feel to be an un-

founded conclusion of the panel that this vessel, at the

time of the accident, had engaged in and/or contemplated

substantial operations in United States ports, I am even

more concerned by the legal implications of the panel’s

opinion. In spite of the panel’s disclaimer that it “do[es]

not, of course, intimate that doing any amount of business

in a United States port, however minor, is alone sufficient

to establish a ‘substantial base of operations’” (Jd. at

317, n.17), the clear purport of the panel’s opinion is

that a foreign defendant whose vessels regularly call at

United States ports subjects itself to American law for

the resolution of personal injury or death claims of the

vessels’ crew members occurring within American waters.

In fact, each of the cases cited by the panel in support

of its holding emphasizes parenthetically the frequency

of visitation to United States ports, or the substantial

revenue earned from United States trade, as the dis-

tinguishing feature of the case. An examination of the

cases cited by the panel, however, belies the notion that

merely conducting business in United States ports is

sufficient to establish a “substantial base of operations”

for purposes of applying American law. None of the cases,

which I review briefly here, involves contacts as insub-

stantial as those in this case.

While it is true, as emphasized by the panel, that in

Rhoditis the Court found that the entire income of the

vessel was from cargo either going to or coming from the

United States, the Court also emphasized that the cor-

porate defendant had its largest office in New York and

another office in New Orleans, and that more than 95%

of its stock was owned by an individual who, though a

Greek citizen, was a United States domiciliary who man-

aged the corporation out of New York. 398 U.S. at 307,

90 S.Ct. at 1733.

Antypas v. Cia Maritima San Basilio, S.A., 541 F.2d

307 (2d Cir. 1976) did involve, as the panel states a

vessel most of whose voyages were to or from United

States ports. However, the Court in determining Ameri-

can law to be appropriate in that case, also relied on the

fact that at least some of the stockholders of the ship-

owner were American citizens, that the vessel was under

the direct control of an American corporation which

directed the vessel from its office in New York, and that

the earnings and expenses of the vessel appeared to be

collected and paid from New York. /d. at 310.

In Moncada v. Lemuria Shipping Corp., 491 F.2d 470

(2d Cir.); cert. denied, 417 U.S. 947, 94 S.Ct. 3072,

41 L.Ed.2d 667 (1974) the Court did find that 40%

of the vessel’s voyages were either to or from American

ports. However, the Court also found that “of the con-

tacts favoring the Plaintiff in the present case, the most

important is that all of the stock of all of the defendants

was owned by Americans.” Jd. at 473. The Court also

found that all of the defendants had their base of opera-

tions in the United States and that the managing and

chartering of the vessel was done from the United States.

Id.

Finally, in Mattes v. National Hellenic Am. Line, S.A.,

427 F.Supp. 619 (S.D. N.Y. 1977, while true that the

District Court found that most voyages of the vessel either

originated or terminated in United States ports, the Court

further found that at least two American corporations

played a significant role in the management of the vessel’s

affairs. Mattes can be further distinguished from our case

since the ship was a passenger vessel the vast majority of

whose passengers were American citizens, and thus, the

Court believed, there was an additional compelling na-

tional interest in applying American law. Id. at 628.

After making my own survey of Circuit Court cases

concerning choice of law under the Jones Act and general

maritime law I have found no case which has held that

the mere fact that a vessel calls regularly at a United

States port is sufficient to satisfy the “substantial base of

operations test” of Rhoditis. In our own Circuit, it is clear

that something more than frequent calls is required, as

evidenced by three cases which the panel opinion failed

even to cite but necessarily failed to follow.

In Merren v. A/S Borgestad, 519 F.2d 82, 83 (Sth

Cir. 1975), this Court, while not mentioning the fre-

quency of visitation of the vessel to the United States,

rejected the application of the base of operations test

finding that

defendants maintained no offices in the United States

and were affiliated with no organization in the United

States, except to the extent of having shipping agents

who contracted in American ports for the use of the

ship’s services.

Id. at 83.

Similarly, in Tamboris v. Kainis Compania Maritima,

S.A., 439 F.2d 1131, 1132 (Sth Cir. 1971), while not

discussing the frequency of visitation of the vessel to the

United States, this Court rejected application of Rhoditis

finding that unlike that case “it is here undisputed that no

American citizens or residents own any share of the own-

ing corporation, directly or indirectly.”

More recent and more to point is an unpublished

opinion of this Court affirming the District Court’s re-

jecting the application of American law on facts strikingly

similar to those in this case. Avila v. M/V TOLUCA

(No. 79-2921, May 30, 1980). The memorandum and

recommendation of the Magistrate, Norman Black, now

United States District Judge, which was adopted in full

by the District Court and which formed the basis for

affirmance by this Court, specifically rejected Plaintiff's

argument that the frequency of the vessel’s visit to the

United States established a substantial base of operations

for purposes of Rhoditis. The memorandum opinion

set out in full as Appendix, found that:

From a reading of the relevant cases . . . doing busi-

ness in, or trading at, a United States port is not the

same thing as establishing a base of operations in the

United States as set forth in Rhoditis.°

Although nowhere expressed, the panel, oblivious to

the existence of these three Fifth Circuit opinions, seems

to operate on the dubious theory that this Court merely

approved as not clearly erroneous the finding by the trial

court that a substantial base of operations was estab-

lished. Where legal standards are involved—as they must

certainly be under Lauritzen and Rhoditis—they may not

be ignored, overlooked or watered down by any such dis-

tortion of the function of F.R.Civ.P. 52(a).

The substantially identical facts in Merren, Tamboris

and most particularly Avila, on the one hand and those

in the instant case cannot justify the rejection of Ameri-

can law in those three while allowing it here. To conclude

otherwise is to permit decision of this very significant

question of law to be determined, not by principles, but

by an unguided fact finding.

6. This Court continues to face claims by foreign seamen based

on tenuous grounds for the application of American law and, after

the decision in this case, will undoubtedly face many more. For

example, very recently in the case of Nunez-Lozano v. Rederi, 634

F.2d 135 (Sth Cir. 1980) this Court was faced with the question

of whether American law was appropriate in a case where a

Honduran seaman was injured in Liberia while aboard a Nor-

wegian vessel. Although he received Norwegian compensation,

the seaman sought to invoke American law on the grounds that he

joined the vessel and signed his seaman’s contract in New Orleans

and that he returned to New Orleans for treatment after the accident.

Faced with insufficient contacts under Lauritzen, the seaman urged

application of Rhoditis on grounds that “the existence of stockholders

in ‘companion corporations’ proved that appellee’s corporate citizen-

ship is not ‘exclusively Norwegian’.” Although the Court declined

application of American law on these facts, one can only wonder if

the Honduran seaman would have presented a different set of facts,

and possibly prevailed, if the instant case had been decided at the

time he first pressed his claim in District Court.

One need only look in the Yellow Pages to see the

number of foreign shipping lines which regularly trade to

and from United States ports in established liner service.

I seriously doubt that when the Supreme Court handad

down Rhoditis, it contemplated that, for example, a

French cargo vessel, owned and operated by the French

government, flying the French flag, carrying a French

crew, and directed out of France, would be subject to

the laws of the United States for the resolution of the

personal injury claims of its crew members occurring in

American ports, even if the vessel regularly called at

United States ports and derived considerable revenue

from this trade.

And yet this is the direct implication of the panel’s

opinion. While such a rule of law might seem to some

to be desirable—lI personally feel it is not—-I believe that

before the federal courts of this Country are opened

significantly wider to the claims of every foreign seamen

and their heirs for injury/death occurring in American

waters, specific directions should come from Congress

or at least from this Court sitting en banc or from

decisive change in the applicable legal standard by the

Supreme Court.

As a major maritime world power encouraging com-

merce to and from America by opening all ports to all

vessels of all nations flying all flags, what does this deci-

sion portend? Does it mean that Congress or federal

courts intended to open all American courts to the

hundreds of thousands of seamen to receive and dispose

of their claims for injury/death fortuitously occurring

within our borders as their ships come here from time

to time?’ Is our renowned largesse for humanity to lead

us not only to substitute our legislative or judicial con-

cepts for those of their own countries, but to supplant

the system and standards thought to be sufficient by their

own countries?

The opinion offers no answer to these and other

troubling questions save the simplistic one: Leave it to

the fact finder—Judge or jury—

I must therefore dissent.

7. Even more disturbing is the unanswered question of whether

federal courts are to be opened to claims of foreign seamen injured or

killed in disparate spots throughout the globe on vessels which merely

call at United States ports. As noted previously (see n.3, supra),

place of injury is a factor of little weight in a strict Lauritzen

analysis and clearly has no weight in a Rhoditis “base of operations”

analysis. If the meager contacts of this case support the application

of American law it is a very small step to apply American law in

cases distinguishable from this case only by the legally insignificant,

for maritime choice of law purposes, fact that the injury/death oc-

curred outside of American waters.

Appendix

The unpublished opinion of this Court in Avila v.

M/V Toluca (No. 79-2921, May 30, 1980) reads as

follows:

Before AINSWORTH, FAY and RANDALL, Circuit

Judges.

PER CURIAM:

Affirmed on the basis of the district court’s order and

judgment dated July 10, 1979 adopting the Memorandum

and Recommendation of the United States magistrate

dated April 6, 1979.

AFFIRMED.

The following is the memorandum and recommenda-

tion of the United States Magistrate, also unpublished:

This action was filed by the father of Rafael Aguilar

Avila, a Mexican seaman who lost his life while serving

aboard Defendant’s ship in the Port of Covington, Mary-

land, on May 5, 1975. Suit was brought under the Jones

Act, 46 U.S.C. § 688, and the General Maritime Law of

the United States. Defendant has filed a motion to dis-

miss for lack of subject matter jurisdiction, and alterna-

tively for the doctrine of forum non convenience. Plaintiff

requests that the Court deny the motion and grant a six-

month period of additional discovery on the questions of

jurisdiction and forum non convenience, or, in the altern-

ative, to transfer the action to the United States District

Court in Maryland.

Defendant alleges the following:

The contacts of Defendant with the United States are

not substantial and are insufficient to invoke the Jones

Act or the General Maritime Laws of the United States.

The only contact that the United States has with this law-

suit is the drowning of Rafael Aguilar Avila in the Port

of Covington, Maryland. Everything else is completely

Mexican, including the following:

1. Plaintiff's descendant, Rafael Aguilar Avila, signed

in Mexico an employment agreement governed by the law

of Mexico for employment aboard the M/V TOLUCA II

as a seaman.

2. Rafael Aguilar Avila was a Mexican citizen and

resident at the time of employment and at the time of his

death.

3. The Plaintiff herein, the father of Rafael Aguilar

Avila, is a Mexican citizen and resident.

4. The vessel, M/V TOLUCA II, is of Mexican regis-

tration and wholly owned by Mexican citizens.

5. The Defendant herein, the employer of Plaintiff,

Transportation Maritima Mexicana, S.A., is a Mexican

corporation wholly owned by Mexican citizens, There is

no United States beneficial ownership of any kind in

Transportation Maritima Mexicana or the M/V TO-

LUCA II. This is not a “flag of convenience” case.

6. All of the members of the crew of the vessel who

could possibly be witnesses of any kind in this cause of

action, are Mexican residents 20d Mexican citizens.

7. The deceased seainan, Rafael Aguilar Avila, and

his employer are subject to Mexican law, and pursuant

to such law, the mother of Rafael Aguilar Avila and his

designated beneficiary, Maria Antonio Avila Alonso, exe-

cuted a release on June 9, 1975, releasing Defendant, the

TOLUCA II, and the captain and members of the crew

of the vessel, in accordance with the laws of Mexico

from any and all responsibility for his death in considera-

tion of the sum of 80,000 pesos.

8. The headquarters and home offices of the Defend-

ant are all located in Mexico. The affairs of the Defend-

ant company were conducted from Mexico. The M/V

TOLUCA II is operated by Defendant from Mexivan

offices and had no base of operations in the United

States. There are no operating agents employed in the

United States. The only agents employed by Defendant

are temporary, husbanding agents who represent the

vessel in a limited capacity only while the vessel is in

a foreign port.

9. The M/V TOLUCA II is an ocean going cargo

vessel and operates out of the ports of Mexico to various

foreign ports of the world, some of which are in the

United States.

Plaintiff generally responds as follows:

1. Thirty percent of Defendant’s shipping business is

done in and out of the ports of the United States.

2. Most of the voyages of the M/V TOLUCA II in

the years 1974 and 1975 (the accident occurred in May,

1975), at least up until it was assigned to a permanent

arrangement outside the United States’ ports in August

of 1975, were to and from the United States. Ninety-

seven visits to American ports for the period 1973 through

August 15, 1975, were counted.

SUBJECT MATTER JURISDICTION

In Bartholomew v. Universe Tankships, Inc., 263 F.2d

437, 440-441 (2nd Cir.), cert. denied, 359 U.S. 1000,

79 S.Ct. 1138, 3 L.Ed.2d 1030 (1959), the Court held

that the Jones Act jurisdiction exists only when there are

substantial contacts between the transaction involved in

the case and the United States, with substantiality deter-

mined on an absolute scale and not by comparing or

balancing the presence of certain contacts with the ab-

sence of others. Moncada v. Lemuria Shipping Corp.,

491 F.2d 470, 472 (2nd Cir. 1974). In determining

whether the contacts are substantial the courts have given

consideration to the significance attaching to specific

contacts. Jd. In Lauritzen v. Larsen, 345 U.S. 571, 583-

590, 73 S.Ct. 921, 928-932, 97 L.Ed. 1254 (1953)

{hereinafter referred to as Lauritzen], the Supreme Court

enumerated the following contacts as worthy of considera-

tion: (1) the place of the wrongful act; (2) the law of

the flag; (3) the allegiance or domicile of the injured;

(4) the allegiance of the Defendant shipowner; (5) the

place of contract; (6) the inaccessability of a foreign

forum; and (7) the law of the forum.

In Hellenic Lines Limited v. Rhoditis, 398 U.S. 306,

308-309, 90 S.Ct. 1731, 1733-34, 26 L.Ed.2d 252

(1970) [hereinafter referred to as Rhoditis], the Court

held that this list is not exhaustive. It decided that the

shipowners base of operations is also an important con-

tact and “there well may be others.”

Plaintiff is putting much emphasis on the fact that the

tort occurred in the United States, where Defendant

conducts thirty percent of its business (including 97

specific trips by the TOLUCA as discussed supra). Plain-

tiff cites many cases to support his position that the place

of injury within the territorial waters of the United States

is in itself sufficient to justify invoking jurisdiction under

the Jones Act or General Maritime Law. The Paula, 91

F.2d 1001 (2nd Cir. 1937), cert. denied sub nom. Peters

v. Lauritzen, 302 U.S. 750, 58 S.Ct. 270, 82 L.Ed. 580

(1937); Hansen v. A. S. D. S. S. v. Endborg, 155 F.

Supp. 387 (S.D.N.Y. 1957); Nakken v. Fearnley and

Eger, 137 F.Supp. 288 (S.D.N.Y. 1955). Actually, all

of such cases hold to the contrary. They hold that injury

in United States waters, alone is insufficient to support

jurisdiction.

The case of Bartholomew v. Universe Tankships, Inc.,

supra, is also heavily relied on by the Plaintiff. In that

case, the United States jurisdiction was upheld, but not

alone on the ground that the injury occurred in the

United States waters. It clearly appeared that the foreign

flag on the vessel was a flag of convenience, the vessel

was owned by United States citizens, and that its base

of operation was New York City. Furthermore, Plaintiff

had applied for United States citizenship. In the case at

bar there was no contention that the TOLUCA was flying

a flag of convenience, or that there was any United States

ownership. The TOLUCA was wholly owned by Mexican

citizens, and the Mexican Federal Government. at was

operated from Mexico.

Plaintiff also places great reliance on the Rhoditis

case and the base-of-operations factor. In Rhoditis the

beneficial owner was a resident of the United States for

eighteen years and conducted the affairs of the corpora-

tion from offices in the United States. The ship involved

was employed exclusively in, and derived all of its income

from, trade in the United States. Plaintiff, in attempting

to place himself within the ambit of this decision, refers

to the fact that the vessels of the Defendant did thirty

percent of its business in United States ports (including

97 trips made by the M/V TOLUCA). From a reading

of the relevant cases the undersigned believes that doing

business in, or trading at, a United States port is not the

same thing as establishing a base of operations in the

United States as set forth in Rhoditis. As a leading com-

mentator observed:

Rhoditis (like Lauritzen) suffers from the customary

weakness of any judicial decision. Just as Lauritzen,

on its facts, had been almost the weakest possible

case for the application of American Law on any

theory, so Rhoditis was the strongest possible case

for its application on what may be called the ‘base

of operations’ theory . . . While a flat overruling of

Rhoditis appears to be unlikely, extension of the

base of operations doctrine to enterprises less clearly

linked to the United States appears to be unlikely.

G. Gilmore and C. Black, The Law of Admiralty 475

(2nd ed. 1975), cited in De Mateos v. Texaco, Inc., 562

F.2d 895, 901-902 (3rd Cir. 1977), cert. denied, 435

U.S. 904, 98 S.Ct. 1449, 55 L.Ed.2d 494 (1978) (em-

phasis added).

Most cases that supports the base of operations and

other similar theories beyond those set forth in Lauritzen

involve similar facts, that is; (1) the corporations prin-

ciple place of business is in the United States, (2) the

managing or chartering agents are located in the United

States, (3) most of the income is derived from cargo

either terminating or originating in the United States,

(4) expenses of the vessel are paid in the United States,

and (5) the actual management of the corporation is

from a United States office. See: De Mateos v. Texaco,

Inc., supra; Antypas v. Cia Maritima San Basilio, S. A.,

541 F.2d 307 (2nd Cir. 1976); Mattes v. National Hel-

lenic Am. Lines, S. A., 427 F.Supp. 619 (S.D.N.Y.

1977). If these elements are not met the court will dis-

miss for lack of subject matter jurisdiction.

In De Mateos v. Texaco, Inc., supra at 899, jurisdic-

tion was held inapplicable even though United States

ownership was involved and the vessels owned by the

corporation “regularly called” at United States ports

(emphasis added).

On the other hand, in Antypas v. Cia Maritima San

Basilio, S. A., supra at 310, jurisdictional requirements

were met since it was found that (1) some of the stock-

holders of Defendant shipowner were United States citi-

zens, (2) the vessel was operated by a New York agent,

who directly controlled the operations of the vessels, and

(3) all earnings were collected and all expenses paid in

New York.

In Mattes v. National Hellenic Am. Line, S. A., supra,

the Plaintiff also alleged that the vessel had made many

visits to the United States (26 in all) and that most of

the voyages either originated or terminated in the United

States. However, either originated or terminated in the

United States. However, jurisdiction was not granted on

this factor alone. The management and operation of the

vessel was centered in New York and at least two Ameri-

can corporations played a significant role in the manage-

ment of the vessel’s affairs.

The base of operations factor is inapplicable here. The

principles of Lauritzen are still fundamental and most

important in determining whether contacts are substantial.

See De Mateos v. Texaco, Inc., supra at 901. The law

of the flag, the allegiance of the Defendant shipowner,

the place of contract, the accessibility of a foreign forum,

and the base of operations of the corporation all point

away from the application of American law. If we are

to justify its application, it must be because, as Justice

Douglas suggested in Rhoditis, “there well may be other

significant factors.” The only one referred to is the per-

centage of the companies operations in the United States

and the number of trips that the vessel has made to

American ports. In light of the foregoing, these are not

substantial enough to find jurisdiction in this case.

Plaintiff has filed an original set of interrogatories with

59 principal questions and over 140 subquestions, a total

of 109 interrogatories, which Defendant has answered.

Plaintiff filed an additional second set of interrogatories,

consisting of 24 questions with 6 subparts, a total of 30

interrogatories, which, as Defendant has alleged, required

voluminous research and great expense to answer. De-

fendant answered these interrogatories on August 21,

1978. Defendant served interrogatories on the Plaintiff

on June 16, 1978, but said interrogatories remain un-

answered by Plaintiff. Defendant has stated that Plaintiff

has made no request to depose any witness within or

without the control of the Defendant. Now, Plaintiff ap-

parently wants more delay to conduct more discovery.

Because of the extensive discovery already conducted by

Plaintiff since July of 1977, when the complaint was

filed, the Magistrate concludes that further discovery is

not necessary for a just and proper disposition of the case.

Accordingly, it is RECOMMENDED that Defendant’s

Motion to Dismiss for Lack of Subject Matter Jurisdiction

be Granted.

The Clerk will file this instrument and transmit a copy

to each party or counsel. Within ten days after receipt

of the copy, a party may file with the Clerk, and serve

on all parties, written objections, pursuant to Local Rule

24 and 28 U.S.C. § 636(b)(1)(C).

Done at Houston, Texas, this 6th day of April, 1979.

APPENDIX 3

UNITED STATES DISTRICT COURT

EASTERN DISTRICT OF TEXAS

BEAUMONT DIVISION

B-76-230 CA

JACK FISHER, ETC., ET AL

THE AGIOS NICOLAOS V, ET AL

—Consolidated With—

B-76-288 CA

EUGENIA KEPESSIDIS, Individually, Etc., ET AL

Vv.

S/S AGIOS NICOLAOS V, ET AL

On the 18th day of August, 1977, a motion by plain-

tiffs to quash notice of discovery depositions issued by

defendants herein came on for hearing and the Court,

being of the opinion that the motion to quash is well-

founded:

IT IS ORDERED that the motion to quash the notice

of the discovery depositions of plaintiffs be and it is here-

by granted, and the notice of depositions previously is-

sued by defendants is quashed, Rule 26(c)(2), Federal

Rules of Civil Procedure; Hyam v. American Export

Lines, Inc., 213 F.2d 221 (2nd Cir., 1954); Ford v.

Urania Transportation, Inc., 168 F. Supp. 240 (N.Y.

1958).

IT IS FURTHER ORDERED that, in accordance with the

discretionary authority vested in this Court, Rule 26(c) (2),

F.R.C.P.; Gibson v. International Freighting Corporation,

1973 F.2d 591 (3d Cir., 1949), certiorari denied, 338

U.S. 832, 70 S.Ct. 78, that if defendants should desire

to take discovery depositions of witnesses in Greece, de-

fendants shall be required to advance to United States

counsel of record for plaintiffs herein necessary and

reasonable travel and subsistence expenses for one at-

torney for plaintiffs, such expenses to be taxed as costs

of these proceedings.

Also presented for hearing before the Court was the mo-

tion filed by defendants requesting the Court to decline

personal jurisdiction under the doctrine of forum non

conveniens and the Court, being of the opinion that the

motion should be denied:

IT JS ORDERED that the motion for the defendants

to decline personal jurisdiction on grounds of forum non

conveniens is overruled. A suit in admiralty between

foreigners is within the jurisdiction of the District Courts

of the United States, U. S. Constitution Article III, Sec.

2; Belgenland v. Jensen, 114 U.S. 355 (1885). Not only

does jurisdiction exist, but it will be exercised “unless

special circumstances exist to show that justice would

be better subserved by declining it.” Jd. at 366. See also

Gkiafis v. S/S YIOSONAS, 387 F.2d 460 (4 Cir., 1967);

Heredia v. Davies, 12 F.2d 500 (4 Cir., 1926.)

Retention of jurisdiction in a suit between foreigners

in admiralty then becomes a matter of the discretion of

the district court judge carefully weighing the matter in

light of numerous criteria which would tend to render

the United States forum appropriate, Lauritzen v. Larsen,

73 S.Ct. 921 (1953). No single factor is or should be

definitive in the Court’s discretionary retention or rejec-

tion of jurisdiction in such cases, but rather the entire

overview of an individual case considered, Hellenic Lines

v. Rhoditis, 90 S.Ct. 1731 (1970); Mpiliris v. Hellenic

Lines, 440 F.2d 1163 (5 Cir., 1972); Bartholomew v.

Universe Tankships, 263 F.2d 437 (2 Cir., 1959.)

In the case at bar, the combined weight of such fac-

tors as the origin of the claimants’ cause of action having

been an explosion and fire in a United States port, Erazo

v. M/V CUIDAD de NEIVE, 270 F.Supp. 211 (D.C.

Md. 1967); see also Gkiafis, supra, investigations have

been undertaken by the United States Coast Guard, the

Beaumont Fire Department, and United States medical

authorities, Dutta v. Clan Graham, 1975 AMC 2509

(4 Cir., 1975), Gkiafis, supra, Conte v. Flota Mercante,

277 F.2d 664 (2 Cir., 1960), S.S. FLETERO v. Arias,

206 F.2d 267 (4 Cir., 1953), Erazo, supra, Sfiridas v.

Santa Cecilia Company, 1966 AMC 2295 (E.D.Pa.

1966), Katelouzos v. Othez, 176 F.Supp. 954 (E.D.Va.

1959), and counsel having been employed by the plaintiff

with substantial and expensive steps toward adjudica-

tion having already been undertaken, Dutta, supra, Gkia-

fis, supra, Conte, supra, Fletero, supra, all direct the

Court’s decision toward a retention of jurisdiction.

Additionally, the factor that a bona fide wage claim

has been alleged by plaintiff pursuant to 46 U.S.C. 596 com-

pels the Court to retain jurisdiction over this particular

controversy, Monteiro v. Soc. Mar. San Nicholas, 280

F.2d 568 (2 Cir, 1963), notwithstanding the fact that

such controversy is between two forcign parties, Strath-

hearn v. Dillon, 252 U.S. 348. Judicial economy and

fairness to all parties dictate that all remaining claims be

disposed of together in a trial on the merits of the entire

dispute, Dutta v. Clan Graham, 1975 AMC 2509 (4

Cir., 1975), Bekris v. Aristoteles, 437 F.2d 219 (4 Cir.,

1971), Conte v. Flota Mercante, 277 F.2d 664 (2 Cir.,

1960.)

The burden of showing forum non conveniens is on

the party alleging inconvenience, and unless the balance

is strongly in favor of such alleging party, the plaintiff's

choice of forum should rarely be disturbed. Gulf Oil

Corp. v. Gilbert, 330 U.S. 501 (1947.) In the case at

bar, respondents’ ship is registered in Liberia, has owner-

ship vested in parties in Greece, and conducts business

in many countries of the world, including the United

States. Respondents have not met the burden of proof

in showing that this Court is an inappropriate forum to

decide the merits of this case.

Accordingly, respondents’ motion to decline jurisdic-

tion is overruled.

IT IS FURTHER ORDERED that the parties disclose

to one another the names and addresses of witnesses

whom they may use at trial herein and that such informa-

tion be incorporated in the pretrial order to be filed by

September 1, 1977.

IT IS FURTHER ORDERED that the above num-

bered and entitled consolidated proceedings be and they

are hereby assigned for trial on the 5th day of December,

1977,

IT IS FURTHER ORDERED that plaintiffs and de-

fendants each advise respective opposing counsel, no later

than two weeks before trial, the identity and location of

each witness from abroad who will be brought to the

United States tor trial.

ORDER ENTERED on this 28th day of November,

1977.

/s/ JOE J. FISHER

Judge, United States District Court

APPROVED AS TO FORM:

PAUL H. DUE’

Paul H. Due’, Attorney for Plaintiffs

Due’, Dodson & deGravelles

442 Europe Street

Baton Rouge, Louisiana 70802

Telephone: 504 383-8851

ROBERT S. DeLANGE

Robert S. DeLange, Attorney for Defendants

Royston, Rayzor, Vickery & Williams

205 Cotton Exchange Building

Galveston, Texas 77550

Telephone: 713 673-1623

APPENDIX 4

IN THE UNITED STATES DISTRICT COURT

IN AND FOR THE EASTERN DISTRICT OF TEXAS

BEAUMONT DIVISION

CIVIL ACTION NO. B-76-230-CA

JACK FISHER, PERSONAL REPRESENTATIVE

OF THE ESTATE OF DIMITRIOS KEPESSIDIS

THE AGIOS NICOLAOS V, ET AL

CONSOLIDATED WITH

CIVIL ACTION NO. B-76-288-CA

EUGENIA KEPESSIDIS, INDIVIDUALLY,

ETC., ET AL

S/S AGIOS NICOLAOS V, HER ENGINES,

TACKLE, ETC., IN REM, ET AL

Honorable Harold Peterson

Peterson, Petit & Peterson

1111 San Jacinto Building

Beaumont, Texas 77701

Honorable Paul H. Dué

Dué, Dodson & deGravelles

442 Europe Street

Baton Rouge, Louisiana 70802

Honorable Joe H. Tonahill

P. O. Box 670

Jasper, Texas 75951

Honorable Frank A. Adams

Adams & Adams

1205 San Jacinto Building

Beaumont, Texas 77701

Attorneys for Plaintiffs

Honorable Robert S. DeLange

Royston, Rayzor, Vickery & Williams

205 Cotton Exchange Building

Galveston, Texas 77550

Honorable E. D. Vickery

Royston, Rayzor, Vickery & Williams

Suite 3710

One Shell Plaza

Houston, Texas 77002

Attorneys for Defendants

FINDINGS OF FACT AND CONCLUSIONS OF LAW

This is a suit for damages for the alleged wrongful

death of Dimitrios Kepessidis, brought by his surviving

widow, minor child, parents and two brothers and sisters.

Plaintiffs predicate their claim on the general maritime

law of the United States and the Jones Act, 46 U.S.C.

§ 688. Trial has been completed and the matter extensive-

ly briefed by both sides, and after due consideration, the

Court submits the following findings of fact and conclu-

sions of law.

FINDINGS OF FACT

Dimitrios Kepessidis, a citizen of Greece, was hired

as the chief engineer for the ship, M/V AGIOS NICO-

LAOS V, and was flown to Beaumont, Texas, to join

the vessel on May 22, 1976.

The AGIOS NICOLAOS V is a Greek flag-flying and

Greek registered vessel owned by defendant, Valsky Mari-

time, Ltd. (Valsky), a Liberian corporation, and is

operated by Valmas Brothers Shipping S.A., (Valmas),

a Panamanian corporation. Valsky purchased the afore-

mentioned vessel on or about April 4, 1976, from a

Swedish vendor. This was the only ship owned by Valsky.

The vessel was placed in dry dock in Cadiz, Spain, for

necessary repairs and alterations, where it remained for

several weeks, until it commenced its maiden voyage

with its new owner during the first part of May of 1976

from Cadiz to Beaumont. The ship sailed to Beaumont

without any cargo and its first business venture was to pick

up a load of corn at the Continental Grain Elevator and

to transport that cargo to the Soviet Union.

Most of the crew joined the ship in Spain, with the

notable exception of Chief Engineer Kepessidis. In his

place was a Swedish chief engineer who sailed with the

ship on its first voyage across the Atlantic for the purpose

of familiarizing the Greek crew with the ship’s operation.

The Swedish chief engineer left the ship on May 26,

1976, or less than four full days after Chief Engineer

Kepessidis joined the ship.

The ship was equipped with two auxiliary boilers,

which boilers were used solely for the purpose of generat-

ing the necessary steam to run certain steam-operated

equipment, but which boilers were not used as the main

propulsion system for the ship (instead a large diesel

engine provided that source of power). Even though both

of these auxiliary boilers were automatic at the time of

their manufacture and placement aboard the ship in

Sweden, with the result that it would not be necessary

manually to light the boilers, these automatic features

were not working at the time Valsky took possession

of the ship, and Valsky made no effort to have these

boilers repaired so as to return them to their automatic

functioning capability. Because these boilers were initially

designed to be automatic rather than manual, they were

not equipped with the usual large sight glass or other

means of permitting an operator to inspect the furnace

of the boiler visually to ascertain whether any problem

existed. These automatic boilers, accordingly, once they

had been reduced to manual operation, lacked this safety

feature which normally accompanies manually-designed

boilers.

The controls for these auxiliary boilers were not labelled

in Greek, but instead were labelled only in Swedish. The

operations manual and instruction manuals pertaining to

these boilers were likewise available only in the Swedish

language.

On the initial voyage from Spain to Beaumont only

the port auxiliary boiler was used, because it was easier

for the operator to light the port boiler, rather than the

starboard boiler, since one control operated both the fuel

and the ignition spark therefore, whereas in order to light

the starboard boiler, it would be necessary for the operator

to attempt to manipulate two controls, one with each

outstretched arm and hand, at the same time.

Shortly after the departure of the Swedish chief engi-

neer trouble was encountered. In particular on the evening

of May 28, 1976, the port boiler exploded. It was only

after the port boiler was thereby rendered inoperative

that any attempt was made to use the starboard auxiliary

boiler. Chief Engineer Kepessidis, accordingly, received

no instruction or guidance from the Swedish chief engi-

neer with respect to the starboard auxiliary boiler and

its mode of operation. Indeed, the Court finds that Chief

Engineer Kepessidis, in the short period of time that he

was aboard the vessel before the first boiler explosion

occurred, and even during the shorter period of time

that he was aboard the vessel before the Swedish chief

engineer departed, did not have much of any opportunity

whatsoever to become familiar with any aspects of the

ship’s engines and other equipment.

When the starboard boiler was initially lit following

the port boiler explosion, the starboard boiler exhibited

a low grade type explosion which scared the engineers,

oilers and other engine room personnel. Mr. Skiadas,

the technical expert for the defendant shipping company

who accompanied the vessel from Spain, however, chided

the engine room personnel for being afraid of the star-

board boiler and ordered them to continue their work

with it and their use of it. Mr. Skiadas was really higher

in the chain of command than Chief Engineer Kepessidis,

being the direct company representative.

At around 11:10 a.m. on June 1, 1976, the starboard

auxiliary boiler exploded or backfired while the oiler,

John Papageorgiou, was attempting to light it. Mr. Papa-

georgiou testified that he had been trained by Third Engi-

neer Vatikiotis and had received no instruction from

Chief Engineer Kepessidis. Mr. Papageorgiou had previ-

ously lit the boiler at around 10:30 a.m., at which time

it had taken him two attempts to ignite the boiler. The

boiler had remained fired until around 10:45 a.m., at

which point the requisite steam pressure had been restored

whereupon Mr. Papageorgiou turned off the furnace to

the boiler. The steam pressure had dropped and Mr.

Papageorgiou had received a communication from Second

Engineer Pados to light the boiler again to restore the

necessary steam pressure. In response to this instruction

Mr. Papageorgiou replenished the water supply and was

getting ready to light the boiler again when Chief Engi-

neer Kepessidis came into the engine room.

10.

Chief Engineer Kepessidis happened to come into the

engine room at this particular time, not for purposes of

supervising or examining the operation of the starboard

auxiliary boiler, but instead solely for the purpose of

inspecting the area where the repaired turbine to the

main diesel engine was going to be lowered down into

the engine room from the overhead open shaft space.

Mr. Papageorgiou approached Chief Engineer Kepessidis

and told him that it had taken two attempts to ignite

the starboard boiler. Mr. Papageorgiou then testified that

Chief Engineer Kepessidis came over to the area where

Mr. Papageorgiou would stand to attempt to ignite the

starboard boiler. Mr. Papageorgiou activated the venti-

lator or purge fan, which would remain continuously in

operation. In time then he and Chief Engineer Kepessidis

simultaneously operated the necessary controls, one being

operated by Mr. Papageorgiou and the other by Chief

Engineer Kepessidis. In particular, Chief Engineer Kepes-

sidis activated the fuel switch, while simultaneously Mr.

Papageorgiou pressed the ignition switch or rod in order

to emit the spark to ignite the aerated fuel mixture which

would enter the furnace. When the boiler did not ignite,

Mr. Papageorgiou and Chief Engineer Kepessidis simul-

taneously de-activated the respective controls. They waited

for ten to twenty seconds before attempting the procedure

again, and again without success, whereupon they both

simultaneously de-activated their respective controls.

Thereafter, Mr. Papageorgiou, after waiting another ten

to twenty seconds, attempted simultaneously to activate

both controls on the third attempt to light the boiler, but

again without success. Mr. Papageorgiou then made a

fourth attempt, which fourth attempt was, according to

his testimony, possibly a little bit longer in duration than

any of the three previous attempts, but again when the

boiler did not ignite, he turned off the fuel switch and

retracted the ignition rod or lever. While he was retracting

the ignition rod an explosion and fire erupted in the

furnace.

11.

Mr. Papageorgiou further testified that on his prior

attempt to ignite the starboard boiler around 10:30 a.m.,

he experienced a dull roaring noise. He further testified

that he and other engine room personnel had experienced

such a dull roaring noise on an intermittent basis from

the starboard boiler once it would ignite, which noise

they did not experience with the port boiler. This noise

likewise scared the engine room personnel, but again

they were chided and ridiculed for their fears by Mr.

Skiadas and by Second Engineer Pados and were told

to continue to use the equipment. Mr. Papageorgiou

further stated that he did not believe that Chief Engineer

Kepessidis was aware of this dull roaring noise problem

with the starboard boiler and Mr. Papageorgiou never

made any effort specifically to report it to Chief Engineer

Kepessidis because of what he and the other workers

had been told by Second Engineer Pados and the special

company representative, Mr. Skiadas, Indeed, Mr. Papa-

georgiou, for those reasons, did not report to Chief Engi-

neer Kepessidis that he had experienced the dull roaring

noise during his lighting of the starboard boiler around

10:30 a.m., immediately before the accident, even though

he testified the noise which he heard at that time was

probably the loudest that he had heard the starboard

boiler make. There is no evidence to indicate that Chief

Engineer Kepessidis was aware of this problem.

12.

Dr. David French, recognized as an expert in marine

engineering, gave his opinion that the low grade explo-

sion and the dull roaring noise were probably attributable

to a defective fuel valve which permitted an excessive

amount of fuel to leak into the furnace of the boiler

during ignition attempts. The Court finds Dr. French’s

testimony and conclusion well-reasoned and supported by

the evidence.

13.

The ventilator fan or purge fan would be able to

remove in the time span allowed between attempts to

fire the starboard boiler the anticipated quantities of

aerated fuel or gas so as not to create any expected

danger, but this fan would not be able likewise to elimi-

nate any unanticipated leakage of unaerated fuel at-

tributable to a defective fuel valve or other defective

equipment.

14,

There was nothing unusual or extraordinary about

requiring as many as four attempts to ignite the star-

board boiler, nor was there anything unusual about it

requiring two attempts to ignite the boiler as had hap-

pened on the previous occasion. Frequently, it would

take the oiler, such as Mr. Papageorgiou, as many as

five or six successive attempts to ignite the port boiler.

Mr. Papageorgiou testified he had never been instructed

to wait as long as a minute or more between attempts

to light either the port boiler or the starboard boiler.

15.

There was nothing intrinsically wrong with the work

method being used by Mr. Papageorgiou at the time he

attempted to ignite the starboard boiler in the presence

of Chief Engineer Kepessidis. His waiting only ten to

twenty second between attempts to ignite the boiler,

under the sircumstances of the type of fuel being used

in the boiler and the fact that the boiler was hot, was

an acceptable work method, at least to the extent that

Chief Engineer Kepessidis cannot be faulted for not hav-

ing ordered Mr. Papageorgiou to cease and desist his

attempts when the boiler did not ignite initially.

16.

It would take at least twenty to thirty minutes to dis-

assemble the bolted front of the furnace in order to

examine the inside thereof to ascertain whether anything

was wrong, and it was not reasonable to expect Chief

Engineer Kepessidis to require the oiler, Mr. Papageor-

giou, to undertake such inspection, particularly since the

vessel was already behind schedule.

17.

The defendants’ vessel and its equipment were unsea-

worthy in that the starboard auxiliary boiler had a defec-

tive leaking fuel valve and defective equipment, in that

the boiler was having to be operated and attempted to

be ignited on a manual basis when the equipment was

designed to be automatic but which automatic features

had broken down and had not been repaired despite

reasonable opportunity for such repair, in that the boiler

was not equipped with an adequate sight glass or other

safety device to accord an operator a reasonable oppor-

tunity to inspect the furnace for possible leaking fuel oil,

in that the controls, operations manuals, etc., were all

in Swedish rather than in Greek, and in that the crew

was not given proper training, instructions and experience

in the proper and safe method to operate these auto-

matically designed boilers in a manual fashion. This un-

seaworthiness proximately caused the accident resulting

in the death of the late Mr. Kepessidis.

18.

The defendants were negligent in causing or permitting

the various unseaworthy conditions as set forth herein to

exist and in failing to provide plaintiffs’ decedent with a

safe place to work, which negligence proximately caused

the accident resulting in the death of Mr. Kepessidis.

19.

After the explosion and fire started all of the engine

room personnel abandoned their posts and fled for safety

with the exception of Third Engineer Poporos and Chief

Engineer Kepessidis. Chief Engineer Kepessidis tried to

fight the fire and yelled for a fire extinguisher. In re-

sponse to this command, Third Engineer Poporos grabbed

a fire extinguisher, which had the shape, size and con-

figuration of a liquid fire extinguisher, which he therefore

turned upside down and struck on the floor in order to

operate, but which fire extinguisher did not work, The

Court finds that the fire extinguisher did not work because

it was either broken or empty, and had the fice extin-

guisher which Third Engineer Poporos grabbed been

working properly, the fire at that time could probably

have been extinguished or at least brought under sufficient

control that the death of Chief Engineer Kepessidis would

not have ensued.

20.

Following the fire there was utter bedlam and con-

fusion aboard ship. There had been no fire drills whatso-

ever since this crew had joined the ship, with the result

that nobody knew exactly what should be done. Shortly

thereafter the decision was reached by the Captain of

the ship and the Port Captain to activate the CO, system.

No attempt was made to take an actual head count of the

ship’s personnel, or at least of the personnel who would have

been in the engine room, to make sure that all of the

engine room personnel had reached safety before shutting

up the engine room and activating the CO, system.

21.

Fire resistant clothing was available aboard the ship

but no attempt was made by the Captain to use such fire

resistant clothing so as to gain access to the engine room

area where the fire and its source of fuel was located so

as to shut off the fuel supply and to rescue any persons

located in the engine room.

22.

There was no real emergency existing which required

the hasty resort to utilization of the CO, system.

23.

Once the CO, system was activated and the automatic

siren sounded, Chief Engineer Kepessidis tried to scramble

to safety, but the convection currents caused the released

CO, to cause him to suffocate. After he sustained severe

pain and suffering, mental anguish and distress and fear

of dying, he finally was overcome by the carbondioxide,

which in combination with the smoke, ultimately caused

him to die later that day from suffocation.

24.

The vessel was, accordingly, likewise unseaworthy in

that the fire extinguisher did not function properly in the

engine room and in that the crew had not been trained in

proper fire drill procedures, which unseaworthiness proxi-

mately caused the death of Mr. Kepessidis.

25.

The defendants were likewise negligent in failing to

assure that all fire extinguishers were functioning prop-

erly, in failing to see that proper fire drill procedures

occurred aboard ship, in resorting to the CO, system

when it was unnecessary to do so and in causing the CO,

system to be activated before any reasonable steps were

taken to ascertain that all engine room personnel had

reached safety. The defendants were likewise negligent

in that no attempt was made to use fire resistant clothing

to reach the engine room to cut off the fuel supply for

the fire and to rescue any persons located in the engine

room. This negligence caused or contributed to the death

of the late Mr. Kepessidis.

26.

Following the outbreak of the fire Mr. Kepessidis re-

mained at his post and attempted to fulfill his obligations

to safe the ship.

27.

Dimitrios Kepessidis sustained some burns to his body

after the fire and explosion, from which he reasonably

experienced pain, but which burns did not contribute

to his death.

28.

Mr. Kepessidis was born in 1932 and accordingly 44

years old at the time of his death on June 1, 1976. His

widow, Eugenia Kepessidis, was born on November 28,

1943. She and the late Mr. Kepessidis were married on

December 26, 1972, and of that marriage one child,

Kosmas, was born on March 2, 1974.

29.

Mr. Kepessidis was paid a monthly wage of $750.00

and a yearly wage of $9,000.00. The Court finds that

Mr. Kepessidis could have continued to work and earn

wages or income for the remaining years of his work-life

expectancy of at least the yearly rate of $9,000.00 and

his work-life expectancy being 19.8 years would give a

gross earnings of $178,200.00. The Court further finds

the future earnings discounted would not more than equal

the increase in earnings that the deceased im all reason-

able probability would have received in the future had he

lived and worked his full remaining work-life expectancy.

30.

The Court further finds that Mr. Kepessidis used and

would have used one-third of his future earned income

for his own personal expenses for the remainder of his

work-life expectancy which would have been the amount

of $59,400.00 with the remaining 66%4rds percent of his

future earnings, to-wit: $118,800.00, to be awarded

equally to the surviving widow and minor child, From

this amount, however, will be deducted the sum of $10,-

000.00 which is to be awarded to the surviving father

and mother of the deceased.

31.

The Court further finds that the surviving widow sus-

tained a loss of her husband’s services at a present dis-

count value of $10,000.00 and that the minor child

Kosmas, has sustained a loss of nurture and guidance as

a result of the death of his father in the present dis-

counted value of $10,000.00.

32.

The Court further finds that the deceased Mr. Kepes-

sidis left a surviving father, Kosmas Kepessidis, and a

surviving mother, Olga Kepessidis, who were partially

dependent upon their son and who sustained a loss of

contributions from their son in the sum of $5,000.00

each for a total amount of damages of $10,000.00.

a2.

The Court further finds that the deceased was also

survived by two adult brothers and two adult sisters who

were in nowise dependent upon the deceased or could

expect to receive any contribution of a pecuniary value.

34.

In addition to furnishing support for his surviving

widow and son, the late Mr. Kepessidis continued to

furnish partial support for his surviving lawful parents,

Kosmas Kepessidis, his father, and Olga Kepessidis, his

mother. Dimitrios Kepessidis was a devoted and loving

son to both of his parents, and both have sustained severe

and demonstrable loss of his society, love and affection,

which loss they will both continue to suffer for the rest

of their lives, in addition to the loss of partial support.

35.

Kosmas Kepessidis, the surviving father of Dimitrios

Kepessidis, has sustained a loss of partial support and

loss of society from the death of his son, past and future,

in the present discounted value of $5,000.00.

36.

Mrs. Olga Kepessidis, the surviving mother of Demi-

trios Kepessidis, has sustained a loss of partial support

and loss of society resulting from the death of her son,

past and future, in the present discounted value of

$5,000.00.

CONCLUSIONS OF LAW

This case is within the Court’s admiralty and federal

question jurisdiction, 28 U.S.C. § 1333; 46 U.S.C. § 688.

Il.

The Court previously concluded and held that it should

refuse the motion to decline jurisdiction for the reasons

set forth in the order rendered herein on November 28,

1977.

Ii.

The Court has likewise concluded that an analysis of

all relevant factors militates in favor of the application of

American Law to the judicial resolution of this contro-

versy. Hellenic Lines, Ltd. vs. Rhoditis, 398 U.S. 306,

90 S.Ct. 1731 (1970); Mattes v. National Hellenic

American Lines, S.A., et al, 427 F.Supp. 619 (SDNY,

1977). The defendants have a substantial base of opeia-

tions in the United States and derive substantial revenue

from United States trade, freight and charter hire. Ac-

cordingly, the American Jones Act, 46 U.S.C. § 688,

and the American general maritime law of unseaworthi-

ness are the legal criteria which should be applied herein

with respect to a determination of liability, and the

American general maritime law as respecting beneficiaries

entitled to recover damages and the types of damages re-

coverable, as particularly exemplified by Moragne v.

State Marine Lines, Inc., 398 U.S. 375, 90 S.Ct. 1772

(1970) and Sea-Land Services, Inc. v. Gaudet, 414 U.S.

573, 94 S.Ct. 806 (1974), is the applicable standard

with respect to determination of issues concerning dam-

ages.

IV.

The findings of fact previously set forth with respect

to unseaworthiness and Jones Act negligence were the

legal and proximate causes of the death of Dimitrios

Kepessidis, thereby warranting imposition of liability

upon both defendants without any reduction in damages

legally recoverable because of the absence of any action-

able contributory negligence on the part of plaintiffs’

decedent.

Plaintiffs, Mrs. Eugenia Kepessid's (Kepessidou), and

the minor child, Kosmas Kepessidis, are entitled to re-

cover damages from defendants, jointly, in the principal

sum of $5,000.00 each for the conscious pain and suffer-

ing sustained by the late Dimitrios Kepessidis before his

death. Law v. Sea Drilling Corporation, 510 F.2d 242

(5th Cir. 1975); Wiggins v. Lane & Company, Inc., et

al, 298 F.Supp. 194 (EDLa. 1969); Evans v. Chevron

Oil Company, 438 F.Supp. 1097 (EDLa. 1977).

VI.

Plaintiff, Mrs. Eugenia Kepessidis (Kepessidou), and

the minor child, Kosmas Kepessidis, are legally entitled

to recover damages from defendants in the sum of $138,-

800.00 as described in the above findings of fact.

VII.

Plaintiff, Kosmas Kepessidis, the lawful surviving father

of the late Dimitrios Kepessidis, is legally entitled to re-

cover from defendants, the sum of $5,000.00 for the loss

of services and contributions which he sustained as a

result of the wrongful death of his son.

VI.

Plaintiff, Olga Kepessidou, the lawful mother of the

late Dimitrios Kepessidis, is legally entitled to recover

from defendants, the sum of $5,000.00 for the loss of

services and contributions which she sustained as a result

of the wrongful death of her son.

IX.

That the surviving brothers and sisters of the late Dimi-

trios Kepessidis are not entitled to recover damages as a

result of their brother’s wrongful death.

In the discretion of the Court all of the aforementioned

awards of damages shall likewise bear pre-judgment in-

terest at the legal rate in Texas from date of death, June

1, 1976, until paid. Cf. Higginbotham v. Mobil Oil Cor-

poration, 360 F.Supp. 1140, 1150 (W.D. La. 1973),

and cases cited therein.

XI.

Defendants, Valsky Maritime, Ltd., and Valmas Broth-

ers Shipping, S.A., are likewise taxed, jointly and in

solido, with all costs of these proceedings.

XII.

To the extent that any of the preceding findings of fact

constitute conclusions of law they are adopted as such,

and to the extent that the preceding conclusions of law

constitute findings of fact, they are adopted as such.

XIII.

Judgment will be rendered in accordance with said

findings and conclusions.

SIGNED and ENTERED this the 11th day of October

1978.

/s/ JOE J. FISHER

United States District Judge

APPENDIX 5

IN THE UNITED STATES DISTRICT COURT

FOR THE EASTERN DISTRICT OF TEXAS

BEAUMONT DIVISION

CIVIL ACTION NO. B-76-230-CA

JACK FISHER, PERSONAL REPRESENTATIVE

OF THE ESTATE OF DIMITRIOS KEPESSIDIS

THE AGIOS NICOLAOS V, ET AL

CONSOLIDATED WITH

CIVIL ACTION NO. B-76-288-CA

EUGENIA KEPESSIDIS, INDIVIDUALLY,

ETC., ET AL

Vv.

S/S AGIOS NICOLAOS V, HER ENGINES,

TACKLE, ETC., IN REM, ET AL

JUDGMENT

This matter was tried on the merits pursuant to regular

assignment, at the conclusion of which trial the matter

was extensively briefed by counsel for all parties and

the case submitted to the Court for adjudication. In

accordance with the findings of fact and conclusion of

law previously rendered, signed and filed of record, judg-

meut is rendered as follows:

IT IS ORDERED, ADJUDGED AND DECREED

that there be judgment in favor of plaintiff, Mrs. Eugenia

Kepessidis (Kepessidou), individually, and against de-

fendants, Valsky Maritime, Ltd. and Valmas Brothers

Shipping, S.A., jointly and in solido, in the total prin-

cipal sum of Sixty-nine Thousand Four Hundred Dollars

($69,400.00).

IT IS FURTHER ORDERED, ADJUDGED AND

DECREED that there be judgment in favor of plaintiff,

Mrs. Eugenia Kepessidis (Kepessidou), as natural tutrix

and legal guardian of the estate of her minor son, Kosmas

Kepessidis, and against the aforementioned defendants,

jointly and in solido, in the principal sum of Sixty-nine

Thousand Four Hundred Dollars ($69,400.00).

IT IS FURTHER ORDERED, ADJUDGED AND

DECREED that there be judgment in favor of plaintiff,

Kosmas Kepessidis, individually, and against the afore-

mentioned defendants, jointly and in solido, in the prin-

cipal sum of Five Thousand Dollars ($5,000.00).

IT IS FURTHER ORDERED, ADJUDGED AND

DECREED that there be judgment in favor of plaintiff,

Mrs. Olga Kepessidou, individually, and against the afore-

mentioned defendants, jointly and in solido, in the prin-

cipal sum of Five Thousand Dollars ($5,000.00).

IT IS FURTHER ORDERED, ADJUDGED AND

DECREED that pre-judgment interest at the legal rate

in Texas (nine per cent [9%] per annum) be awarded

to all the aforementioned plaintiffs from the date of

death, June 1, 1976, until paid.

IT IS FURTHER ORDERED, ADJUDGED AND

DECREED that all costs of these proceedings be and

they are hereby assessed against the aforementioned

defendants, jointly and in solido.

JUDGMENT RENDERED AND SIGNED on this

6th day of December, 1978.

/s/ JOE J. FISHER

United States District Judge

APPENDIX 6

UNITED STATES COURT OF APPEALS

For The Fifth Circuit

No. 79-1103

D. C. Docket No. B-76-230-CA & B-76-288-CA

JACK FISHER, Etc.,

Plaintiff-Appellee,

versus

THE AGIOS NICOLAOS V, ET AL.,

Defendants-Appellants.

* * * *

EUGENIA KEPESSIDIS, INDIVIDUALLY,

ETC., ET AL.,

Plaintiffs-Appellees,

versus

THE AGIOS NICOLAOS V, Etc., ET AL.,

Defendants-Appellants.

Appeal from the United States District Court for the

Eastern District of Texas

Before MORGAN, CHARLES CLARK and TATE,

Circuit Judges.

JUDGMENT

This cause came on to be heard on the transcript of

the record from the United States District Court for the

Eastern District of Texas, and was argued by counsel;

ON CONSIDERATION WHEREOF, It is now here

ordered and adjudged by this Court that the judgment

of the said District Court in this cause be, and the same

is hereby, affirmed;

It is further ordered that defendants-appellants pay to

the plaintiffs-appellees the costs on appeal, to be taxed

by the Clerk of this Court.

October 10, 1980

Issued as Mandate:

APPENDIX 7

IN THE UNITED STATES DISTRICT COURT

FOR THE EASTERN DISTRICT OF TEXAS

BEAUMONT DIVISION

NO. B-76-203-CA

NICOLAOS DENAXAS, PERSONAL

REPRESENTATIVE OF THE ESTATE

OF NASSOS STAHTAS

VALMOS BROTHERS SHIPPING S.A., ET AL

IN THE UNITED STATES DiSTRICT COURT

FOR THE EASTERN DISTRICT OF TEXAS

BEAUMONT DIVISION

NO. B-76-298-CA

POPOROS VASSILIOUS

VALSKY MARITIME, LTD.,

THE AGIOS NICOLAOS V,

AND VALMOS BROTHERS SHIPPING S.A.

DEPOSITION OF CHRISTOFIS VALMAS

IN THE UNITED STATES DISTRICT COURT

FOR THE EASTERN DISTRICT OF TEXAS

BEAUMONT DIVISION

NO. B-76-230-CA

JACK FISHER, ETC., ET AL

THE AGIOS NICOLAOS V, ET AL

IN THE UNITED STATES DISTRICT COURT

FOR THE EASTERN DISTRICT OF TEXAS

BEAUMONT DIVISION

NO. B-76-298-CA

EUGENIA KEPESSIDIS, INDIVIDUALLY,

ETC., ET AL

S/S AGIOS NICOLAOS, ET AL

DEPOSITION OF CHRISTOFIS VALMAS

DEPOSITION AND ANSWERS of Christofis Valmas,

called as a witness by the defendants, taken before Roger

Rehorn, a notary public in and for Harris County, Texas,

taken at No. 3 Akti Miaouli, Piraeus, Greece, on the

19th day of September, 1977, between the hours of

5:30 p.m. and 7:35 p.m., pursuant to Notice and the

following stipulation and waiver of counsel.

IT IS STIPULATED AND AGREED by and between

counsel for the respective parties hereto that this deposi-

tion is taken pursuant to the paragraphs below, numbered

2, 3 and 4.

(1) That the deposition of the witness named in the

caption hereto may be taken at this time and place be-

fore the herein named notary public of Harris County,

Texas; time and Notice being waived; and that the said

deposition, or any part thereof, when so taken, may be

used on the trial of this cause with the same force and

effect as if the witness were present in court and testify-

ing in person.

(2) That the necessity for the witness reading this

deposition and signing same is waived.

(3) That the necessity for preserving objections at

the time of taking is waived, and that any and all legal

objections to this deposition, or any part thereof, may be

urged at the time same is sought to be offered in evi-

dence on the trial of this cause.

(4) That formal notification of filing is waived.

(5) That the witness shall read and sign this deposi-

tion before any notary public.

(6) That the necessity for preserving objections at

the time of taking is waived, and that any and all legal

objections to this deposition, or any part thereof, may be

urged at the time same is sought to be offered in evidence

on the trial of this cause; except, however, that objections

to the form of the questions and/or responsiveness of the

answers must be made at the time of taking, or else such

objections are specifically waived.

(7) That the notary may swear the witness with the

same force and effect as if he were a notary of

County, Texas.

(8) That the witness shall read and sign this deposi-

tion before any notary public prior to the commencement

of trial.

APPEARANCES

Mr. Paul H. Due, of the law firm of Messrs. Due,

Dodson & DeGravelles, 442 Europe Street, Baton

Rouge. Louisiana, appearing for the plaintiffs.

Messrs. Bryan F. Williams, Jr., and Robert S. De-

Lange, of the law firm of Messrs. Royston, Rayzor,

Vickery & Williams, Cotton Exchange Building, Galves-

ton, Texas, appearing for the defendants.

ALSO PRESENT: Rea Manidaki

Evangelos Tsouroulis

INTERPRETER: Argine Carter

I, Roger Rehorn, a notary public in and for Harris

County, Texas, may swear the witness just as if we were

taking this testimony in Harris County, Texas, with the

same force and effect, and it can be used for all purposes

just as if I were swearing the witness in Harris County,

Texas.

ARGINE CARTER

was duly sworn by the notary to act as interpreter.

(All questions and answers are through the in-

terpreter unless otherwise indicated. )

CHRISTOFIS VALMAS,

was called as a witness by the defendants and, being first

duly sworn by the notary, through the interpreter, testi-

fied as folows:

DIRECT EXAMINATION

Questions by Mr. Williams:

Q. Mr. Valmas, you have given your full name and

address to the reporter, have you not?

A. Yes.

Q. And, as you know, my name is Williams and I am

representing your companies in a lawsuit that is pending

in Beaumont, Texas. You are generally famliar with the

fact that those suits are pending against your companies

in Beaumont, are you not?

A. Yes.

Q. You realize, also, Mr. Valmas, that Mr. Due, here,

who I introduced to you before we began, is here repre-

senting the widow of Mr. Kepessidis, the widow of—

THE INTERPRETER: Excuse me. Can we do the

widows one at a time? It’s just a matter of making sure

I get the names right.

MR. WILLIAMS: Oh, I see. Surely.

Q. (By Mr. Williams) . . . the widow of Mr. Stahtas;

and Mr. Poporos. Finally, you understand that since you

are testifying this afternoon under oath, your testimony

will be transcribed by this gentleman?

A. Yes.

Q. ... filed with the court in the United States?

A. Yes.

Q. ... and will be used just as though you were giving

evidence in a United States District Court?

A. Yes.

Q. What is the nature of your business, Mr. Valmas?

A. It is a shipping concern.

Q. Are you connected with Valmas Brothers?

A. It is a family concern between brothers.

Q. And are you connected with another company,

Valsky Maritime, Ltd.?

A. The Valsky Company is the one that owns the

ship, the AGIOS NICOLAOS, the name of the ship in

question; and the other company is the operating com-

pany.

Q. Now, would you tell us with respect to Valmas,

first, who owns that corporation?

A. It’s a family concern between brothers.

Q. Will you name the brothers who are stockholders

owning that corporation?

A. Nicholas Valmas, Christopher Valmas, Dimitris

Valmas. So, three brothers; Nicholas, Christopher and

Dimitris Valmas.

Q. And those three brothers of whom you are one own

one hundred percent of the stock of Valmas. Is that

correct?

A. Yes. There is no other stockholder or partner.

Q. Now, Mr. Valmas, I think it would be better, since

we are using an interpreter, if you let her interpret for

you, even though some questions you may understand

directly in English. If we do it all one way, we will prob-

ably move faster than if you answer some in English and,

then, wait for the others. Okay?

Now, do the three Valmas brothers own the stock of

the corporation for their own account, or do they in any

way hold any of the trusts for others?

A. No. They belong, outrigh:, for themselves. There

is no holding. They do not hold them for anybody else.

Q. Who are the officers of Valmas?

A. The three brothers.

Q. Do you know the positions that each holds?

A. Nicholas Valmas is the president, Christofis Val-

mas is the vice president; the treasurer is Dimitris Valmas.

Q. Where is Valmas, Incorporated? Under the laws of

what company?

A. Valmas Brothers Shipping, S.A., which is the full

name, I believe—

MR. WILLIAMS: Ask him if that is the full name.

A. Yes, this is the name of the Greek company, the

operating company.

Q. Now, I go back to my question, so the record will

be clear. Now, wait a minute. We have got to get the two

corporations straight. I’m talking about, first, Valmas

Brothers Shipping, S.A.

A. Yes.

Q. Where is that corporation originated, under what

law is that corporation chartered?

A. It has been registered in Greece and is under Greek

law.

Q. Under what law was the charter?

A. According to Greek law. It has been chartered ac-

cording to Greek law.

Q. Mr. Valmas, is it not a fact that that corporation is

incorporated under the laws of the Republic of Panama?

A. I make a mistake.

There is another company which is called Valmas

Shipping Company which has been incorporated, which

owned ferry boats, which was incorporated under Panama

law—under Greek law.

Valmas Brothers Shipping Company is a Panama

company. It’s chartered under the laws of Panama.

Q. And that is the company that was operating the

AGIOS NICOLAS V?

A. The mistake occurred because we used to own

another Greek company that ran ferry boats, which we

do no longer own, and which used to travel inside Greece.

Q. Now then, insofar as Valsky Maritime, Ltd., is

concerned——

MR. DUE: Excuse me.

(Discussion off the record.)

Q. (By Mr. Williams) Mr. Valmas, because of the

confusion about the company that used to own the ferry

boats, I’ll ask you one time, again, to name the share-

holders of Valmas Brothers Shipping, S.A.?

A. The three brothers.

Q. The same three brothers?

A. Yes.

C. And they own one hundred percent of the stock?

A. There are no other stockholders,

Q. And insofar as you know, they are the officers and

hold the offices in that corporation that you have de-

scribed?

A. Yes.

Q. And that corporation is incorporated under the

laws of the Republic of Panama?

A. Yes.

Q. All right. Now, we turn to Valsky Maritime, Ltd.

Under what law is that corporation incorporated?

It’s under Liberian law.

And who are the stockholders of that corporation?

The same three brothers.

Who are the officers of that corporation?

The same three brothers.

. Do they hold the same offices in that corporation

as they do in Valmas?

A. Yes, they hold the same titles, same positions.

Q. Now, you have already testified that Valsky, during

the month of May and June of 1976, owned the AGIOS

NICOLAOS V. Is that correct?

A. Yes. And this is still the case. It still owns that ship.

Q. When did you acquire that ship?

A. If I remember correctly, it was sometime in Febru-

ary or March of 1976. I do not remember exactly.

Q. All right. And you have owned it continuously

since that time?

A. There have been no changes from the day that we

took it over.

Q. Does Valsky Maritime, Ltd., own any other sea-

going vessels?

OPOPopr

A. It owns no other seagoing vessels except for the

AGIOS NICOLAOS.

Q. Does Valmas operate any vessels other than the

AGIOS NICOLAOS?

A. You mean, Valmas Brothers?

Q. Valmas Brothers.

A. Yes, certainly, they own ships, again.

Q. Now, what ships do they operate?

A. AGIOS NICOLAOS, MARIANA, RINOULA—

four ships: AGIOS NICOLAOS, MARIANA, RINOULA

and VALMAS.

MR. DUE: Would you spell those for me, please? I

mean, I know the AGIOS NICOLAOS.

THE WITNESS: Okay. The second is MARIANA,

M-A-R-I-A-N-A; the third one is RINOULA, R-I-N-O-U-

L-A; and the fourth one is VALMAS, V-A-L-M-A-S.

MR. WILLIAMS: I believe, so that there will be no

question, counsel, MARIANA is spelled with two N’s.

(Discussion off the record.)

MR. WILLIAMS: Oh, I beg your pardon. I’m sorry.

MR. DUE: Okay.

Q. (By Mr. Williams) Now, under what law are those

three vessels registered?

A. They are registered under Greek law, and they

carry the Greek flag.

Q. During a period of, say, five years prior to May

the 28th, 1976, had Valmas Brothers operated any ves-

sels other than the four you have told us about?

A. Valmas Brothers always ran their own ships, but

in the past they have also had other ships that have

since been sold.

Q. Yes. Now, just during the five years before—

THE INTERPRETER: I’m sorry. Didn’t you say

prior to the 28th of May?

MR. WILLIAMS: Yes. I said, prior to the 28th of

May, 1976, what ships, in addition to the ones he has

already told us about, have they operated during the

past five years?

A. (Continuing) There was the AGIOS NICOLAOS

IV.

Q. (By Mr. Williams) Excuse me.

Now, what has happened to that ship?

A. It was sold for scrap.

Q. All right, sir. During the time you operated it—

A. There was another one called VALMAS which

was also sold for scrap. There was another one called

ANTONIS which was also sold. Some other Greeks

bought it.

Q. During the period of time that you operated those

three vessels that are now gone, under what flags, flag

or flags, were they registered?

A. The AGIOS NICOLAOS and the VALMAS, un-

der Greek flag, and the ANTONIS was under the Leba-

nese flag. We also owned Greek ships, those ferry boats,

which we have since sold.

Q. Fine. All right.

Now, returning to the ships that you presently operate,

the four that you presently operate, which of those ships

during the five-year period before May the 28th, 1976,

had called at ports in the United States?

A. I do not remember, exactly, but the MARIANA

had called in the United States and, possibly, the AGIOS

NICOLAOS, but I am not sure. I cannot remember.

MR. DUE: Which AGIOS NICOLAOS are we talk-

ing about?

THE WITNESS: No. IV.

MR. DUE: Okay.

Q. (By Mr. Williams) Prior to May the 28th—

A. I am not at all sure about the other ships, but

I know that the MARIANA called in the United States.

Q. Now, when you were operating these ships, do

you operate them as what is commonly known in the

industry as tramp vessels?

A. Yes.

Q. .. . as distinguished from vessels that make regular

calls, advertised calls, at ports, which are called liners?

A. No.

Q. And you have never operated liner service with

any of these ships?

A. No, never.

Q. Now, state whether or not your method of opera-

tion is to obtain a charter on each of the ships; that is,

to get some company to, in effect, rent from you a ship

for a voyage or voyages or for a certain period of time?

Is that the principal way you operate?

A. These ships were either under time charter or

were on ordinary trips under their own operation, voyage

charters. So, they were either time charter or voyage

charter.

Q. All right. That means, for the benefit of the court,

that someone else comes along and rents, in effect, hires

your ship either for a certain period of time, such as six

months or a year, or to make a particular voyage or

series of voyages?

A. Yes, that, also, can be done.

Q. Well, is that what is done? That’s the way—

A. Yes, this is what is done.

Q. All right. So, when a ship is under charter, who

decides where the ship is going to go?

A. The person who has chartered it decides where the

ship is going to go.

Q. Now, Mr. Valmas, has either Valmas or Valsky

ever maintained any type of branch office or general

agency in the United States of America?

A. There were no branch offices in the United States,

nor were there any agents.

Q. From what point are the operating orders sent to

the ships that are owned by Valsky or operated by Valmas

Brothers?

THE INTERPRETER: Mr. Valmas is asking what

kind of orders. For instance, the orders of travel would

be sent by the charter party, the person, but he is not

quite clear on what you mean.

Q. (By Mr. Williams) No.

If the master of the ship needs any sort of operating

instructions from Valmas or Valsky, where do these

instructions come from? Do they come from some office

somewhere else, or where do they come from?

A. The orders leave from Piraeus in Greece.

Q. And they go directly to the ship from Piraeus?

A. And they go directly to the ship from Piraeus.

Q. Now then, has either Valmas or Valsky ever ad-

vertised its vessels as being available through any sort

of newspaper or commercial services, of any sort, in the

United States of America?

A. No, no direct advertising has ever been made, but

these ships are rented through agents.

Q. Brokers?

THE INTERPRETER: Brokers. Thank you.

Q. Does either Valmas or Valsky carry on any other

business than the owning and operating of these ships?

A. No, they are not involved in any other business.

Q. Of what citizenship are the officers of the ships

owned by Valsky and operated by Valmas Brothers?

A. They are all of Greek origin and citizenship.

Q. Of what citizenship are most of the unlicensed crew

members of those vessels?

A. They could be Greek, but they could be foreign,

as well, the lower members of the crew.

Q. Such men as seamen and oilers and messmen?

A. Greek, but if no Greeks are available, then, other

nationalities.

Q. Are you obligated to hire Greeks if they are avail-

able?

A. Under Greek law, we have to have—seventy-five

percent of the crew must be Greek.

Q. At the time the AGIOS NICOLAOS, that is, No.

V, was on her first voyage to the United States, was she

under a charter?

A. Yes, it was under charter.

Q. Do you recall who the charterer was?

A. I do not remember the name of the company. The

agreement should have it.

Q. Let me suggest—

A. The charter party.

Q. Let me suggest, to refresh your recollection, that

you look at these documents.

A. The charter party is Tradax International, S.A.

Q. Do you happen to know under the laws of what

country Tradax, Incorporated—

THE INTERPRETER: Mr. Valmas does not re-

member. He is checking the agreement, again, to see.

He does not know what the nationality is.

Q. (By Mr. Williams) Does Valmas Brothers, Ltd.,

or Valsky, or any of the three Valmas brothers have any

financial interest whatsoever in Tradax?

A. No, they are totally unknown to each other. They

do not know each other.

Q. This charter which I am going to ask the reporter

to mark at this time, please, actually consists of several

pages. This charter indicates that it was concluded in

London. Is that correct?

(The instrument was marked “Valmas Deposi-

tion Exhibit No. 1” for identification by the

reporter. )

A. Yes, it was concluded in London, but it was done

through the means of a Greek broker.

Q. A Greek broker was representing you, is that cor-

rect, and Tradax had a company representing them?

A. Yes.

Q. And those two brokers, acting on behalf—one on

behalf of the charterer and one on behalf of the owner

actually concluded or fixed the charter in London?

A. Yes, they concluded this agreement in London.

Q. Do you keep any employees, of any sort, that is,

employees of Valmas Brothers, Ltd., Valsky, or any

employees, personally, of any of the shareholders of those

two companies resident in the United States, for any pur-

pose whatsoever?

A. No. Everybody lives in Greece. Everybody has

their legal residence in Greece.

Q. Now, from time to time when your vessel goes

into a foreign country, it becomes necessary for someone

to arrange for a local agent to handle the business affairs

of that ship at each of the ports she calls in?

A. These agents are usually designated, appointed by

the charterers, but the owners can also appoint a pro-

tecting agent.

Q. And the function of the charterer’s agent usually

is to handle the routine business of entering the ship,

seeing that the cargo gets to the ship, and that sort of

thing.

A protecting agent is there to stand by in case some-

thing comes up that needs the owner’s—or involves the

owner’s interest, as distinguished from the charterer’s in-

terest. Is that correct?

A. Yes.

Q. Now, on those occasions where you appoint a pro-

tecting agent at a foreign port, do you do it on the basis

of that particular call of the vessel, or do you have some-

one that serves on a monthly or a yearly or a stated

period of time?

A. A protecting agent is called in for any specific—

for one specific situation that arises. It’s not necessarily

the same one. It is not always the same. The protecting

agent is not always the same that covers it.

Q. When a protecting agent is appointed, is he ap-

pointed just for the time that the ship calls at that port?

A. The protecting agent is hired only for the period

during which the ship is going to be in port.

Q. And when the ship finally sails from that port, his

work is done?

A. He has nothing more to do when the ship sails.

Q. How do you normally appoint a protecting agent?

A. He is appointed either by letter of appointment or

by a telex.

Q. Depending on how much time you have?

A. Yes, for the length of time that the ship is going

to be in port.

Q. Does Valmas Brothers, Ltd., or Valsky own any

property in the United States of America?

A. No, they do not own anything.

Q. Are the four vessels that you have told me about

subject to mortgages?

A. Yes, there are mortgages on these vessels.

Q. Are those mortgages arranged with Euro dollars?

A. Yes.

Q. Does Valsky maintain a bank account of any sort

in the Unted States of America?

A. No, no bank account. No bank account, except

with the banks that we work with, do business with.

Q. All right. What banks in the United States do you

do business with?

A. Irving Trust and with the Continental Bank which

also has an office here in Piraeus. It is not an American

bank. It’s English. It is an English bank,

THE INTERPRETER: The Continental Bank with

which they do business here in Piraeus has its head office

in London, Mr. Valmas thinks.

Q. (By Mr. Williams) But it is affiliated with the

Continental Bank of Chicago?

THE INTERPRETER: He does not know. They have

worked exclusively with the Continental Bank in Piraeus.

Q. (By Mr. Williams) And with respect to the Irving

Bank, do you deal with that primarily in Piraeus or in

London?

A. Through the Irving Trust we send money accord-

ing to a difference in time—because of a difference in

time, for sums that have to be paid.

Q. And all of these transactions have to do with the

underlying Euro dollars mortgages?

A. Yes, all transactions are made with Euro dollars.

Q. And the transactions with the bank are only with

respect to the mortgages?

A. Yes, and they have to do only with the mortgages

on the ships.

Q. Now, have any of those banks ever had anything

to do with the ownership or operation of any of your

vessels other than simply having accepted a loan pledged

by a mortgage on the vessel?

A. The relations with the bank are only for the loan

and because they carry a mortgage on the vessels.

Q. But the question was: do the banks have anything

to do with the actual operations of the vessels?

A. No.

Q. Did you know or did you have occasion to meet Mr.

Kepessidis?

A. I met him personally because we had requested

from an office of Chandris Lines, from the Department of

Crews, and the director, the manager of that particular

department, whose name is Mr. Vollikas, sent Mr.—

THE INTERPRETER: He was looking for work, and

he came to Mr. Valmas, who met him, and Mr. Valmas

sent him to the technical department where he met Mr.

Vassilikos who was also the superintending engineer, who

discussed with him and examined him and made sure

that he was capable of—if he was capable of working

for Valmas or not.

Q. (By Mr. Williams) That’s the only contact you had

with him?

A. That was the only contact I had.

THE INTERPRETER: In any case, Mr. Valmas’ job

is not this particular section. It’s not something that he

occupies himself with.

MR. WILLIAMS: I understand.

Q. (By Mr. Williams) Then, you called a friendly

company and asked if they had someone that might serve

as a chief engineer?

A. Yes. This is a very unusual thing; especially, as

there is a lack of trade personnel, and all companies ask

each other when they need somebody.

Q. And, so, they sent you this gentleman, you met

him, and turned him over to the supervising engineer,

and that’s, really, all you knew about the man?

A. Yes.

Q. Are you a technical man with engines, Mr. Val-

mas?

A. No. I am an economist.

Q. Now, I want to be sure that there is no question

about the following questions—about your answers to

the following questions.

Is any citizen of the United States employed in any

capacity by Valmas Brothers, Ltd.?

A. Neither in Greece nor out of Greece, there is no

one.

Q. Is any director of Valmas Brothers, Ltd., or

Valsky, a citizen of the United States?

A. No. Everybody is Greek.

Q. Does Valmas Brothers operate ships through sub-

sidiary corporations?

THE INTERPRETER: Mr. Valmas says that each

ship is independently incorporated and is its own com-

pany, but they are all managed by Valmas and Valsky,

and all the stocks of all the ships are owned by the same

people, which are the three Valmas brothers.

Q. Now, is any of the owning companies of the other

ships, that is, other than the AGIOS NICOLAOS V, the

other three, is any of those companies incorporated under

the laws of the United States of America?

A. No, none of them are incorporated in the United

States.

MR. WILLIAMS: We pass the witness.

CROSS EXAMINATION

QUESTIONS BY MR. DUE:

Q. Mr. Valmas, who held the mortgage on the AGIOS

NICOLAOS V?

A. Continental Bank.

Q. Do they still have the mortgage on that vessel?

A. They still have the mortgage.

Q. And they were the original mortgagee. Is that,

correct?

A. Yes, they were the original mortgagees.

Q. The AGIOS NICOLAOS V, is that the only asset

of Valsky Maritime, Ltd.?

A. Yes.

Q. When was Valsky Maritime, Ltd., incorporated?

THE INTERPRETER: Whenever the ship was bought,

and Mr. Valmas does not remember exactly. He cannot

remember an exact date, but the incorporation took place

at the same time as the buying of the ship.

Q. Did the charter with Tradax already exist in favor

of the prior owner of the AGIOS NICOLAOS V, or was

that charter brokered after Valsky bought the vessel?

A. The charter was brokered with this company after

the purchase of the vessel. It had nothing to do with

the previous owners of the vessel.

Q. Was not the charter executed on the same day

as a memorandum of understanding between the seller

and Vaisky, as purchaser of the vessel?

THE INTERPRETER: This is a detail that Mr. Val-

mas does not remember because somebody else is in

charge of the charter department.

Q. How did you come to know about the vessel being

for sale? In other words, did you have a broker that put

you and the seller of the vessel together, or how was

that negotiated?

A. It was bought through brokers.

Q. Was that the same broker who brokered the charter

or was it a different broker?

THE INTERPRETER: Mr. Valmas does not know.

He knows that the vessel was bought through the brokers,

Eurolines, Eurolines Laliotes, but whether they are the

same people who negotiated the charter, he really does

not know.

Q. Where is that company, the Eurolines?

A. It is based in Piraeus.

Q. Well, were they the agents or brokers for the

Swedish company from whom Valsky purchased this

vessel?

A. No. Those were different brokers.

Q. I have previously been furnished with a document

entitled “Memorandum of Agreement,” which I will mark

Plaintiff Valmas 2, and pardon me. I have got a cold.

I am having difficulty talking. But, anyway, I note—

and, of course, the agreement speaks for itself—but the

first part of the agreement—and I don’t know. Can you

read English? Well, the agreement, of course, is dated

April 4, 1976, is it not?

A. Yes.

Q. And the agreement has a long name which is,

obviously, the Swedish seller of the vessel?

A. Yes.

Q. And it says that that company of Sweden “herein-

after called the sellers have today sold,” and, then, which

really doesn’t have any place but, then, there is the name

of Valsky Maritime, Ltd., Monrovia, Liberia.

A. These were the former owners.

Q. The Swedish company was?

A. Yes.

Q. And the seller to Valsky of the ship?

A. Yes, they are the sellers.

Q. And it shows that the ship is sold for a price of

six million six hundred fifty thousand U.S. dollars. Is

that right?

A. Yes.

Q. And it also shows that the ship is to be delivered

at Cadiz, Spain, in about twenty-one days. Is that correct?

A. Yes.

Q. Now, with that information, would you not agree

that the charter had already been negotiated at the time

of the sale of the vessel or the purchase of the vessel to

Valsky?

THE INTERPRETER: He says that, usually, when

you are getting—in other words, if you are developing

a business, you also try to get business for it. You can-

not have a ship sitting around, waiting.

Q. Okay. Well, why were you to take delivery of the

ship in Spain?

A. The ship was in dry dock in Spain on account of

the sellers. They had it in dry dock in Spain, and it was

getting a general checkup, or whatever they get.

(Disussion off the record.)

MR. DUE: Could we just state on the record at this

time that Exhibit Defendant Valmas 1 shows that the

100

date of the charter was April 30, 1976, and that the date

of the closing »greement on the sale was April the 4th,

which was some, whatever, twenty-six days. And let the

record further show that the only reason I was pursuing

those questions: the copy of the time charter previously

supplied to me by opposing counsel is, concededly, il-

legible with respect to the month. The only thing that

appeared on it was the 30th day.

Q. (By Mr. Due) Have you ever been to the United

States, Mr. Valmas?

A. Never.

Q. What about either of your brothers?

THE INTERPRETER: His brothers have gone. He

thinks that both the elder and the younger have gone to

the United States, visited the United States.

Q. What was the purpose of their going to the United

States?

THE INTERPRETER: His elder brother had gone,

and he thinks his sister-in-law was living in the United

States. He had relatives in the United States. They were

Greek who happened to be living in the United States,

and he went there on a family visit. And he thinks the

younger brother went as a tourist. He does not know.

Q. Who is the name of the relative in the United

States? What is the name of the relative in the United

States?

A. This was in 1950. Lemos. The name is Lemos.

The sister of his brother’s wife married somebody called

Lemos. They were living—who was Greek. They were

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both Greek. They were living in the United States at the

time, and the brother-in-law went to visit them. And

they are now living in Greece. They are no longer living

in the United States.

Q. Okay. Do you know what if any changes were made

to the vessel with respect to the auxiliary boilers?

A. Originally—to begin with, I’m not a technical per-

son. I do not know what kind of technical matters car-

ried out. That’s only the technical department, but I just

don’t involve myself with that, at all.

THE INTERPRETER: He is aware of the fact that,

certainly, repairs were made, but he does not know what.

Q. Are you not aware of the fact that when this vessel

was originally manufactured, these auxiliary boilers were

automatic with respect to the water in the boilers?

THE INTERPRETER: There are technical matters

with which he has never been concerned and does not

know. It’s not matters that he deals with. He heard about

them once in a while, but nothing—anything systematic,

he does not know, but the technical department knows

what is going on, is up to date.

Q. All right. What have you heard about that?

THE INTERPRETER: What he has heard is that an

accident occurred and that two people died.

Q. Does Valmas do the maintenance of these vessels

as well as operate the vessels?

A. Yes, both the maintenance and the operation.

Q. Who with Valmas would know what changes were

made with respect to these boilers either from the way

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they functioned when it was initially manufactured, or

the way it functioned when it was owned by the Swedish

company, compared with the way it functioned after it

became the property of Valsky?

A. The technical department that dealt with the vessel.

Q. Who in the technical department?

A. Mr. Valsamakis and Mr. Vassilikos.

MR. DUE: Is either one of these gentlemen being

produced?

MR. DeLANGE: Mr. Valsamakis is scheduled to

testify.

Q. (By Mr. Due) Why do you create a separate cor-

poration to own each ship?

A. So that each company will be responsible for the

ship that it owns.

Q. Why do you use a Liberian corporation, such as for

Valsky, instead of forming a Greek corporation?

A. The other companies are not Greek.

Q. I’m asking you why, when you create a corporation

to own a ship, do you create, as you did in the case of

Valsky, a Liberian corporation instead of using a Greek

corporation to own the ship?

A. Because the Liberian company is more helpful.

Q. How is it more helpful?

A. It’s more convenient.

Q. How is it more convenient?

A. It’s easier in terms of movement.

THE INTERPRETER: All the companies that—not

only their companies, but all companies that are outside

Greece are either under Panamanian or Liberian.

103

Q. Do you not do that for tax reasons?

THE INTERPRETER: No, because they pay taxes in

Greece. There is a tax that is affixed and which is paid.

All ships that carry a Greek flag pay Greek tax.

Q. If Valsky Maritime, Ltd., were a Greek corporation

instead of a Liberian corporation, would not you have to

pay income tax to the Republic of Greece on income that

would be earned by Valsky?

(Discussion off the record.)

(The preceding question was read by the reporter.)

A. (Continuing) I am going to repeat—

MR. WILLIAMS: Counsel, I hate to cut you off, but

unless you can show me some relevance—you are not

from the Greek IRS. I do not want to cut you off. If you

can show me any possible relevance to this, and anything

having to do with the status of the parties to the case,

but in the absence of that, and in view of the time, I am

going to instruct the witness that he does not need to

answer that question.

MR. DUE: Well, you can do that.

MR. WILLIAMS: I want to give you the opportunity

now to express to me any relevance you see to it.

MR. DUE: Well, really, I truly think that when you

start dealing with these different entities—and a question

obviously has been raised by the defense as to what law

is applicable—I think, if somebody decides to incorporate

104

under the law of a particular country, we are entitled to

know why. You got to take the good with the bad. I think

I am entitled to pursue it. If you so instruct the witness

and I, you know, decide to pursue it through seeking pro-

tective relief, et cetera, then, we will do that.

MR. WILLIAMS: We can go a little further with it, if

it can be interpreted. I just think the relevance of it is

awfully thin, but go ahead.

Greek shipping companies are not subject to income

tax.

Q. (By Mr. Due) Okay. Why did you and your broth-

ers create Valmas Brothers Shipping as a Panamanian

corporation?

A. Because all shipping companies are registered under

Panama law because it gives them the possibility to work

more freely.

Q. What do you mean by that?

A. More easily; comfortably or easily.

Q. Why is that?

A. All shipping companies are Panama companies

because they are afforded certain facilities, and that’s why

they are Panama companies.

Q. What facilities?

A. From the point of view of organization.

Q. Is that the only benefit that you obtain from Pana-

manian incorporation?

A. The Panama companies afford the possibility of

moving and working more freely; and from that point

of view, they are preferred.

Q. They are preferred by you?

A. By all shipping interests.

105

THE INTERPRETER: They are not the only ones.

Q. So, you do feel that definite benefits flow to you

and your brothers by having a Liberian corporation, such

as Valsky?

A. It’s not absolute.

Q. What do you mean, “It’s not absolute”?

THE INTERPRETER: The reason for the formations

of these companies is that they have greater freedom of

movement, but does not really know what other benefits

to describe since, in any case, they pay taxes here in

Greece.

Q. All right. Have you maintained Valsky as a legiti-

mate Liberian corporation?

A. The company, Valsky Company, is registered in

Liberia, but the ship, itself, is registered in Greece. The

ship’s registry is in Greece, and it flies a Greek flag.

Q. I know, but that didn’t answer my question, Have

you maintained Valsky Maritime, Ltd., as a legitimate

corporation under the laws of Liberia?

A. Certainly.

Q. And have you, likewise, maintained Valmas Broth-

ers Shipping as a legitimate Panamanian corporation?

A. Yes, certainly, it’s a Panama company.

Q. The first voyage that the AGIOS NICOLAOS V

took was to Beaumont, Texas, from Spain. Is that correct?

A. The first journey, yes.

Q. And the vessel sailed over to Beaumont empty,

did it not?

A. It went from Cadiz to the States empty.

Q. And how much hire was earned by Valsky on the

particular voyage?

106

A. How much what?

Q. Hire, h-i-r-e.

THE INTERPRETER: He does not remember. He

says it’s written in the agreement—in the charter.

Q. Was this one voyage made under this charter or

was there more than one voyage?

THE INTERPRETER: He says these are details, and

it’s all included in the charter party; and if you need the

information, it’s all there.

Q. Well, the only thing I have is this particular time

charter, and I'll ask you to look at that and answer that

for me, then, if you would, please.

_ A. (Indicating. )

Q. By that you are referring to lines beginning thir-

teen through seventeen of the charter?

This was only one voyage in this charter. Is that cor-

rect?

A. Yes, only one voyage.

Q. Was this charter completed, this one voyage?

THE INTERPRETER: I beg your pardon?

Q. Was this charter completed, this one voyage?

THE INTERPRETER: I'm sorry. I don’t understand.

Does is mean that—what? Did they fulfill that charter?

Q. Was the charter completed or performed?

A. Yes, it was completed with this one voyage.

Q. Was the charter hire made in accordance with

this charter? In other words, did Valsky receive the

amount as set forth in the terms of this charter?

107

THE INTERPRETER: Yes, they did receive it.

Q. Okay. What voyages has the AGIOS NICOLAOS

V made after this maiden voyage?

A. It worked with other companies, with other chart-

erers, with a Belgian firm whose name I’m not sure how

you spell.

THE INTERPRETER: But their charters come in

constantly.

Q. Has this vessel ever called at the United States

after this initial call in Beaumont?

A. Yes, it went, again.

Q. When did it go, again?

THE INTERPRETER: He does not remember when,

but it would load coal and go. But he says there are

agreements that can be found.

Q. How many times has this vessel gone to the United

States?

MR. WILLIAMS: Excuse me, counsel. You mean,

since the accident or including the accident voyage?

Q. (By Mr. Due) Including the accident. Or, let’s

say, how many times other than the accident?

A. I think, three times, including the maiden voyage.

Q. Where is this vessel now?

A. It’s in Canada, and it’s on its way to South Africa.

Q. When was it last in the United States?

A. About a month ago.

Q. About how many times has the MARIANA called

in the United States?

108

THE INTERPRETER: He does not remember. He

says, “I don’t know where I would remember from, ex-

actly.” He doesn’t know.

Q. Can you give me some reasonable approximation?

A. Three times, four times.

THE INTERPRETER: He doesn’t remember.

A. (Continuing) It depends on the cargo. If it’s wheat,

they go, or grain. If it’s wheat or grain, they go.

Q. When the AGIOS NICOLAOS V has been chart-

ered, Valmas has been the employer of the crew. Is

that correct?

A. Yes.

Q. How does Valmas make arrangements for supply-

ing the vessel when it calls at a United States port?

A. There are various ship chandlers, offices, with whom

the Valmas comes into contact, and they make arrange-

ments for whatever necessary provisions are taken aboard.

THE INTERPRETER: He says there are many dif-

ferent companies.

Q. What happened to the AGIOS NICOLAOS V in

Mobile, Alabama, after it left Beaumont?

THE INTERPRETER: He says there are things that

he simply cannot remember and dates that he cannot

keep in mind.

Q. Is it not true that there was another boiler ex-

plosion aboard the vessel in Mobile?

109

THE INTERPRETER: He says, “Yes, there were

certain explosions,” but he does not remember when or

where, exactly.

Q. Who

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