Opposition Brief — Warn v. M/Y Maridome

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FIERED

. ' AUG 19 1999

No. 99-139

™ OF THE CLERK

IN THE

Supreme Court of the United States

MICHAEL JOHN WARN, ef al.,

- Petitioners,

M/Y MARIDOME, her Engines, Tackle, Apparel, Furni-

ture and Appurtenances, in rem; MARIDOME MARINE

LIMITED, a Corporation, in personam, JAMES Boos,

in personam, and BOSTON WHALER, INC., a Corpora-

i in personam,

tion, in p Respondents.

On Petition for Writ of Certiorari to the

United States Court of Appeals

for the Ninth Circuit

BRIEF IN OPPOSITION

7EORGE J. KOELZER

Counsel of Record

ROBERT J. ZAPF

JOSHUA S. FORCE

HANCOCK ROTHERT &

BUNSHOFT LLP

515 S. Figueroa Street

17th Floor

Los Angeles, California 90071

(213) 623-7777

Counsel for Respondents

M/Y MARIDOME,

Maridome Marine Limited,

August 19, 1999 and James Boos

WILSON - Brae Printine Co., Inc. - 789-0006 - WasHINGTON, D.C. 20001

QUESTION PRESENTED

Whether the Jones Act applies to claims asserted by

foreign plaintiffs for the death of, or injury to, citizens of

foreign nations suffered aboard a foreign-owned, foreign-

flagged, non-commercial vessel in foreign territorial waters.

(i)

RULE 29.1 LISTING

Respondent Maridome Marine Limited has no parent

company or non-wholly owned subsidiaries.

TABLE OF CONTENTS

Page

QUESTION PRESENTED .. i

RULE 29.1 LISTING . il

TABLE OF AUTHORITIES iv

STATEMENT OF THE CASE 2

SUMMARY OF ARGUMENT ............. 4

REASONS FOR DENYING THE PETITION ____. 5

I. THE NINTH CIRCUIT’S OPINION IS CON-

SISTENT WITH EARLIER OPINIONS OF

THIS COURT AND OTHER LOWER

Soa TIEN cesidiparssaitseeseicnenspieninbsesteaninentstatinennnenasnasonasas 5

II, THE LOWER COURTS HERE CONSIDERED

ALL OF THE LAURITZEN/RHODITIS FAC-

TORS AND FOUND NONE SUPPORTED

APPLICATION OF UNITED STATES LAW... 10

III. THE NINTH CIRCUIT’S OPINION PROP-

ERLY BALANCES THE APPLICABLE CON-

GRESSIONAL AND JUDICIAL POLICY

CONSIDERATIONS .0.o..o..o.occcccccccccossoccsccececesceseees 16

SUT TIINUINININ Sastcnssnsbsieditiiesccsasstsedheaisistnnisamnissssccadesnashsc 22

(iii)

TABLE OF AUTHORITIES

CASES Page

Antypas v. Cia. Maritima San Brasilio, S.A., 541

F.2d 807 (2d Cir. 1976), cert. denied, 429 U.S.

EE. CED creierisincidseininvintennmniuiibinennetnianenlinion 7

Bilyk v. VESSEL NAIR, 754 F.2d 1541 (9th Cir.

SIRE ceinnsanintnnesicnnntaiienmsinnsaniaaniinnedsshadiimiaiininumintelieitib 5, 17

Carbotrade S.p.A. v. Bureau Veritas, 99 F.8d 86

(2d Cir. 1996), cert. denied, 520 U.S. 1274

AIIIITIT IF cicnabseiiets abeidesceinibbuek tcchicsapiideniaaiaeldoticaedatiaanatanadaenlahdailadas 20

Dalla v. Atlas Maritime Co., 771 F.2d 1277 (9th

Sts Me I I cc cssectteneen 9

DeMateos v. Texaco, Inc., 562 F.2d 895 (8d Cir.

1977), cert. denied, 485 U.S. 904 (1978) ............ 18

Fajardo v. Tidewater, Inc., 707 F.2d 858 (5th Cir.

1983) (per curiam), overruled in part on other

grounds by In re Air Crash Disaster Near New

Orleans, La., 821 F.2d 1147 (5th Cir. 1987)

SI III sccnascceainsinnsibcenscnsaesnnicisnanshasintascienmaiaiiilisaicnbamiiiinis 7

Fitzgerald v. Texaco, Inc., 521 F.2d 448 (2d Cir.

1975), cert. denied sub nom. Hapag-Lloyd, A.G.

v. Texaco Panama, Inc., 423 U.S. 1052 (1976)... 5

Gonzalez v. Naviera Neptuno A.A., 882 F.2d 876

EEE, Sh COUN. eansesinoniacenniiecndigncaucnapaiecnnciansaebanunnnain 6

Hellenic Lines Ltd. v. Rhoditis, 398 U.S. 306

ATED ‘icccsisnusccchscetsaiilhatabiiliaschiiaidceibissiiieeicataauaaaamanal 4, 5, 6, 11, 20

Hernandez v. Naviera Mercante, C.A., 716 F.

Mm. THD CER .B. Ti, RGB) a nccssccccesscccasisnecrercrecessss 6

Ioannides v. Marika Maritime Corp., 928 F. Supp.

Se a tirs SEE cicuskcatscessenieiadeinnsanaiebenamadanainilaas 7

Koke v. Philips Petroleum Co., 730 F.2d 211 (5th

Cir. 1984), overruled in part on other grounds

by In re Air Crash Disaster Near New Orleans,

La., 821 F.2d 1147 (5th Cir. 1987) (en banc).... 20

Kukias v. Chandris Lines, Inc., 8839 F.2d 860 (1st

UIA, III <acdlshtcctocsnsicet nacietisocanamensahiaanidehanabidaieeehemancibiadioahatadios 20

Lauritzen v. Larsen, 345 U.S. 571 (19538) -.000000...... passim

Pereira v. Utah Transp., Inc., 764 F.2d 686 (9th

Cir. 1985), cert. dismissed, 475 U.S. 1040

SS ITITUIED ‘cicssserasesenietansinenansctiebalieiiclbdciinbaticsbsasiisinliteaisdaimatbbinatiaiin 9

TABLE OF AUTHORITIES—Continued

Phillips v. Amoco Trinidad Oil Co., 682 F.2d 82

(9th Cir. 1980), cert. denied, 451 U.S. 920

CRIA D sanseisnssisaissecsnsenssassnntRisinheisendeatniancemmaniaiadasasiaiiianaiaie

Rainbow Line, Inc. v. M/V TEQUILA, 480 F.2d

De Ge Ga BED shentteainceneneae

Rojas v. Kloster Cruise, A/S, 550 So.2d 59

6 RR ears

Romero v. International Terminal Operating Co.,

Bk Rs AEE eee

Sigalas v. Lido Maritime, Inc., 776 F.2d 1512

Cee GRE, FRIIS cccncnssnssesbssatinoeuesainansenecabaatamnninne

STATUTES

46 United States Code App. Section 688 ....................

46 United States Code Sections 761-68 ...........0000.......

OTHER AUTHORITIES

H. Edwin Anderson III, The Nationality of Ships

and Flags of Convenience: Economics, Politics,

and Alternatives, 21 TuL. Mar. LJ. 189

RTTED sxcusnscsicecchiatinentnapstiniinnaaeenipchaiicaeceninaineaaamaaaniad

128 CONGRESSIONAL RECORD 25422-25429 (1982)....

David W. Robertson & Paula K. Speck, Access to

State Courts in Transnational Personal Injury”

Cases: Forum Non Conveniens and Antisuit

Injunctions, 68 TEX. L. REV. 987 (1990) .............

Frank L. Wiswall, Jr., Flags of Convenience, in

UNITED STATES SHIPPING POLICIES AND THE

WORLD MARKET 107 (William A. Lovett ed.,

Page

DDG) seeennescensssennnetinennncnsnthignenensennetiannbiananniinaneanini 14, 15, 16

In THE

Supreme Court of the United States

No. 99-139

MICHAEL JOHN WARN, et al.,

¥ Petitioners,

M/Y MARIDOME, her Engines, Tackle, Apparel, Furni-

ture and Appurtenances, in rem; MARIDOME MARINE

LIMITED, a Corporation, in personam, JAMES Boos,

in personam, and BOSTON WHALER, INc., a Corpora-

tion, in personam,

ih Dinan Respondents.

On Petition for Writ of Certiorari to the

United States Court of Appeals

for the Ninth Circuit

BRIEF IN OPPOSITION

Respondents M/Y MARIDOME (sometimes the

“Yacht”), Maridome Marine Limited (“MML”), and

Captain James Boos (collectively “Respondents”) re-

spectfully request that this Court deny the Petition for

Writ of Certiorari (the “Petition”) seeking review of the

opinion of the Court of Appeals for the Ninth Circuit in

this case. That opinion is reported at 169 F.3d 625 (9th

Cir. 1999). The District Court’s opinion is reported at

961 F. Supp. 1357 (S.D. Cal. 1997).

iil a aie

STATEMENT OF THE CASE

The M/Y MARIDOME (ex STEFAREN) is a 177-

foot ocean-going pleasure yacht. The Yacht is registered

in the British Registry under the laws of the United King-

dom and flies the British flag. (Pet. App. A-3; Pet. App.

B-59). The Yacht is owned by MML, which is a corpor-

ation organized and existing under the laws of the States

of Jersey, Channel Islands. (Pet. App. A-3; Pet. App.

B-59). MML purchased the Yacht in 1992.7

The Yacht’s ultimate beneficial owner is Enrique

Molina, who is a citizen and resident of Mexico. (Pet.

App. A-3; Pet. App. B-59). Molina’s principal business

offices are in Mexico, and he has no offices or businesses

in the United States. From the date of her purchase by

MML, MML and Molina have used the Yacht for recrea-

tional and social purposes, sailing to different parts of the

world at Molina’s instructions.2, (C.R. 118(1) at 128;

C.R. 118(2) at 51-56, 59).

This suit arose out of a maritime accident that occurred

on September 3, 1995 when a tender from the Yacht

allided with an unlit, unmarked metal structure main-

tained by the Government of Greece in the Port of Poros,

Greece. As a result of the allision, Petitioners’ decedents

Nicolas Warn and Simon Willshaw were killed, and Peti-

tioner Richard Brooks was injured. Warn, Willshaw, and

Brooks were members of the Yacht’s crew at the time of

_ 1Since its incorporation, MML has fully observed the necessary

corporate formalities. MML is fully capitalized, owning the Yacht,

which it purchased for $22,500,000, without a mortgage.

2 The Yacht has visited numerous countries in Europe, the South

Pacific, and North, Central, and South America. During Captain

Boos’s captaincy, from February 1995 until the date of suit, the

Yacht made seven trips to Mexico, totalling 203 days, four trips

to the United States, totalling 55 days, and three trips to British

ports, totalling 15 days. (Clerk’s Record (“C.R.’”) 132 at 2-3).

the accident and subjects of the United Kingdom.® (Pet.

App. A-4; Pet. App. B-59). Warn, Willshaw, and Brooks

signed their articles of employment in Barbados, Gibraltar,

and St. Martin, respectively, and not in the United States.

Immediately following the accident, on September 5,

1995, relatives of thc Greek Plaintiffs filed an application

for the arrest of the M/Y MARIDOME in the Court of

Piraeus, Greece under the Greek Code of Civil Procedure.

The Greek Plaintiffs sought security for the release of

the Yacht in an amount commensurate with the amount

of damages a court in the Usited States might award

them. The Greek Court denied this request and ordered

security in an amount less than the Greek Plaintiffs had

sought. Respondents posted the required security, which

permitted the Yacht to depart Greece.

Thereafter, the Greek Plaintiffs, joined by Warn’s rela-

tives, commenced substantive proceedings against MML,

seeking damages under Greek law. MML brought an

impleader action against the Greek State for indemnity

due to its failure to light or mark the metal structure

with which the tender allided. When the Greek Court

subsequently denied the Greek State and claimants’ re-

quest for an adjournment, the claimants withdrew their

actions in Greece without prejudice to their reassertion

in the future.

Despite the pendency of the Greek court proceedings,

Petitioners filed this action against Respondents, in the

United States District Court for the Southern District of

California, on October 17, 1996 and caused the re-arrest

3 Two other individuals killed in the accident were not members

of the crew and were dual citizens of Greece and Germiany. (the

“Greek Plaintiffs”). The Greek Plaintiffs were also parties to this

action originally but voluntarily dismissed their appeal from the

District Court’s order.

of the M/Y MARIDOME in the Port of San Diego, Cali- |

fornia. In this action, Petitioners sought recovery under

the Jones Act, 46 U.S.C. App. § 688, Death on the High

Seas Act (“DOHSA”), 46 U.S.C. §§ 761-68, and/or gen-

eral maritime law. By order dated March 31, 1997, the

District Court granted Respondents’ motion to dismiss

Petitioners’ complaint for, inter alia, lack of jurisdiction

under the Jones Act (i.e., the non-applicability of United

States law to their claims) and forum non conveniens.

The Ninth Circuit affirmed the District Court's dismissal

of Petitioners’ complaint on both choice-of-law and forum

non conveniens grounds.

SUMMARY OF ARGUMENT

In Lauritzen v. Larsen, 345 U.S. 571 (1953), and

Hellenic Lines Ltd. v. Rhoditis, 398 U.S. 306 (1970).

this Court enunciated a flexible, multi-factor test for

resolving choice-of-law issues in suits brought under the

Jones Act by foreign seamen. Petitioners urge this Court,

however, to replace this well-established test with a rigid,

single-factor test, which would apply the law of the ship-

owner's base of operations, to resolve choice-of-law issues.

The Petition should be denied because: (1) No conflict

exists among the lower courts concerning the application

of the multi-factor test, which is applied flexibly to the

particular facts of each case; (2) the Ninth Circuit and

the District Court held that none of the Lauritzen/Rhoditis

factors, including the base of operations, supported the

application of United States law; (3) the Ninth Circuit

did not hold that the law of the flag was dispositive or

that the base of operations could not be dispositive in the

appropriate case; and (4) no commercial policy, foreign

policy. federalism, or other policy concern is implicated by

the “Question Presented” in the Petition.

Se Sy a ee

REASONS FOR DENYING THE PETITION

I. THE NINTH CIRCUIT'S OPINION IS CONSISTENT

WITH EARLIER OPINIONS OF THIS COURT AND

OTHER LOWER COURTS.

In Lauritzen v. Larsen, 345 U.S. 571, 583-92 (1953),

and Hellenic Lines Ltd. v. Rhoditis, 398 U.S. 306, 308-09

(1970), this Court formulated a flexible, eight-factor test

for determining whether United States law applies to the

claims of foreign seamen. The factors to be weighed are:

(1) place of the wrongful act; (2) law of the vessel’s

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

(4) allegiance of the shipowner; (5) place of the con-

tract; (6) inaccessibility of the foreign forum; (7) law

of the forum; and (8) base of operations of the ship-

owner. Although Lauritzen was a Jones Act case, this

Court has extended its test to all cases arising under gen-

eral maritime law. Romero v. International Terminal

Operating Co., 358 U.S. 354, 381-84 (1959). The lower

federal courts have held that the Lauritzen/Rhoditis test

applies to DOHSA actions as well. Fitzgerald v. Texaco;

Inc., 521 F.2d 448, 454 (2d Cir. 1975), cert. denied

sub nom. Hapag-Lloyd, A.G. v. Texaco Panama, Inc.,

423 U.S. 1052 (1976).

In holding that foreign law governed Petitioners’

claims, the Ninth Circuit weighed all of the Lauritzen/

Rhoditis factors. The Court of Appeals did not rely solely

upon the law of the Yacht’s flag or hold that “the flag

presumptively controls,” as Petitioners suggest. (Pet. at

24). Rather, the Ninth Circuit recognized simply that the

law of the flag was the only factor it had previously con-

sidered “potentially dispositive . . ., ‘unless other factors

point decidedly in a different direction.”” (Pet. App.

B-66 (quoting Bilyk v. VESSEL NAIR, 754 F.2d 1541,

1545 (9th Cir. 1985) (emphasis added)). Here, the

Ninth Circuit found, however, that “the law of the flag

and a majority of the other factors point decidedly in the

same direction . . . [i.e., toward the application of foreign

law].” (Pet. App. B-66 (emphasis added); see also Pet.

App. B-64). The Ninth Circuit was plainly correct in so

holding.

The Ninth Circuit’s opinion is entirely consistent with

this Court’s holding in Rhoditis. In Rhoditis, this Court

held only that “the shipowner’s base of operations is

another factor of importance in determining whether the

Jones Act is applicable; and there well may be others.”

398 U.S. at 309 (underlining added). Rhoditis did not

hold that the base of operations was the most important

factor. As the District Court noted here, the “Ninth Cir-

cuit has consistently weighed all eight of [the Lauritzen/

Rhoditis| factors, according the most weight to the law

of the flag, the shipowner’s base of operations, and the

citizenship of the injured seamen.” (Pet. App. A-25 &

n.6 (citing cases)). The lower courts’ opinions properly

considered the Lauritzen/Rhoditis factors in light of this

Court’s precedent.

The Ninth Circuit’s opinion is also in accord with

decisions of other circuit courts, including those cited

in the Petition. (See Pet. at 25-26). As Petitioners

themselves admit, the rule in other circuits is only that

the base of operations factor “may be decisive.” (/d. at

25 (emphasis added) ). In Gonzalez v. Naviera Neptuno

A.A., for example, the Fifth Circuit stated that “the base

of operations of the defendant may sometimes be deci-

sive.” 832 F.2d 876, 880 (Sth Cir. 1987) (emphasis

added). The Fifth Circuit applied foreign law to the

claims, in Gonzalez, because the defendant, the vessel’s

flag, and the base of operations were all foreign. Jd. at

880-81. Similarly, the district court concluded in Hernan-

dez v. Naviera Mercante, C.A., 716 F. Supp. 939, 943

(E.D. La. 1989), that “based upon the Fifth Circuit

law, the two most important factors, in a choice of law

question, are the flag of the vessel and the vessel owner's

base of operations.”

The Second Circuit’s holding in Antypas v. Cia. Mari-

tima San Brasilio, S.A., 541 F.2d 307 (2d Cir. 1976),

cert. denied, 429 U.S. 1098 (1977), upon which Peti-

tioners also rely, is not to the contrary. (See Pet. at

25). Antypas involved a factual situation very different

from the present case. There, the seaman was injured

aboard a commercial vessel owned in part by Americans

and engaged in a liner service between United States and

foreign ports, which was operated by an American com-

pany. Id. at 310. Accordingly, the Second Circuit held

only that under the facts of that case those contacts

with the United States were “substantial and predominate

over such factors as the ship’s flag, the place of incorpor-

ation of the shipowner, and the seaman’s nationality.”

Id. The Second Circuit did not announce a general rule

elevating the base of operations factor above the other

Lauritzen/Rhoditis factors in all cases.*

The decision by a Florida Court of Appeals in Rojas

v. Kloster Cruise, A/S, 550 So.2d 59 (Fla. Dist. Ct. App.

1989), also cited by Petitioners, presents another case

that is plainly distinguishable on its facts. (Pet. at 25-26).

In that case, the shipowner was a Norwegian company

that maintained its principal place of business in Miami,

4 Both the Fifth Circuit and district courts within the Second

Circuit have held that, under the facts of a particular case, other

factors may outweigh even a United States base of operations.

See, e.g., Fajardo v. Tidewater, Inc., 707 F.2d 858, 861-62 (5th Cir.

1983) (per curiam), overruled in part on other grounds by In re

Air Crash Disaster Near New Orleans, La., 821 F.2d 1147, 1163

n.25 (5th Cir. 1987) (en banc); Joannides v. Marika Maritime

Corp., 928 F. Supp. 874, 380 (S.D.N.Y. 1996).

Florida, was partly owned by American citizens, and was

authorized to do business in Florida. Jd. at 60 n.2. The

shipowners’ cruise ship operations accounted for all of its

more than $300,000,000 in revenue and were largely

based in Miami, which was the home port of its ships and

from where all of its cruises sailed. Jd. As the Rojas

Court concluded, “it would be hard to imagine a commer-

cial situation in which American interests, to the virtual

exclusion of any others, so completely control both the

daily commercial operations and the long-term prosperity

of the defendant and its vessels. . . . [Tjhe operation of

the defendant’s liner is economically indistinguishable from

that of a hypothetical United States flag vessel owned by

United States interests.” Jd. at 64.

While these facts may have supported the application

of United States law in that case, they are very different

from the facts in the present case and highlight the dif-

ference between a commercial maritime operation and, as

here, the use of a recreational vessel. In fact, all of the

cases cited by Petitioners demonstrate the importance of

the facts of the particular case to the Lauritzen/Rhoditis

analysis. As this Court recognized in addressing the

“superficial” variance in the case law in Lauritzen, 345

U.S. at 573 & n.3, “[n]o two of these cases present

exactly the same basis for application of American law

and their contrary results do not necessarily mean in 9n-

sistency. But they illustrate different considerations w .ich

influence choice of law in maritime tort cases.” The cper-

ation of the M/Y MARIDOME, a pleasure vacht, does

not present the same facts or concerns as did the large

commercial maritime operations involved in the cases

Petitioners cite.» Regardless, unlike Petitioners’ proposed

5 Accordingly, Petitioners are wrong in asserting that the result

in this case would necessarily have been different if they had re-

test, the present test gives courts the flexibility to deal

with such disparate factual situations by balancing all

eight Lauritzen/Rhoditis factors.

Accordingly, the Ninth Circuit, like the Second and

Fifth Circuits, has weighed the base of operations factor

more heavily than other factors, including the law of the

flag, where, unlike here, the facts of the case required.

In Dalla v. Atlas Maritime Co., 771 F.2d 1277 (9th

Cir. 1985) (per curiam), for example, the Ninth Circuit

affirmed the application of United States law to the claims

of a foreign seaman. The Ninth Circuit held that:

The [district] court concluded that the Lauritzen and

Rhoditis factors militated in favor of starting [sic] a

Jones Act claim not only because the vessel’s base of

operations is in the United States but also because

the vessel’s owners were apparently United States na-

tionals [i.e., the apparent reason the district court

determined the base of operations was in the United

States] and the injury occurred within the United

States. In the context of the facts of this case, the

trial judge correctly accorded significant weight to

those factors and comparatively less weight to the

vessel’s [foreign] flag and to the nationality of the

injured party and the vessel’s operator.

Id. at 1278-79 (distinguishing Pereira v. Utah Transp..,

Inc., 764 F.2d 686 (9th Cir. 1985), cert. dismissed, 475

U.S.-1040 (1986), which found the base of operations

was not dispositive under different facts). The Ninth

Circuit also declined to follow the law of the flag in

Phillips v. Amoco Trinidad Oil Co., 632 F.2d 82 (9th

Cir. 1980), cert. denied, 451 U.S. 920 (1981). Peti-

tioners are simply wrong in contending that the Ninth

Circuit mechanically applies the law of the flag.

arrested the M/Y MARIDOME in a different jurisdiction. (See

Pet. at 26).

II. THE LOWER COURTS HERE CONSIDERED ALL

OF THE LAURITZEN/RHODITIS * ACTORS AND

FOUND NONE SUPPORTED APPLICATION OF

UNITED STATES LAW.

The “Question Presented” in the Petition is whether a

court can give greater weight in conducting the Lauritzen/

Rhoditis choice-of-law analysis to a vessel’s flag of con-

venience than the shipowner’s United States base of oper-

ations. The Petition makes clear, however, that Petition-

ers are really asking this Court to hold that the base of

operations is the dispositive factor in all cases. In doing

so, the Petition rests upon three erroneous presumptions,

none of which finds any support in either the decisions

below or the record.

First, contrary to Petitioners’ suggestion (Pet. at 21),

the Ninth Circuit did not ignore the importance of the

shipowner’s base of operations under the Lauritzen/

Rhoditis analysis. Instead, the Court of Appeals held

that:

Here, all of the relevant Lauritzen factors point to-

ward the application of foreign maritime law, rather

than the Jones Act: the accident occurred in Greek

coastal waters; the Maridome flies a British flag;

none of the injured or deceased parties are or were

American citizens or domiciliaries; the shipowner is

a Mexican citizen and domiciliary; none of the in-

jured or deceased sailors’s [sic] employment con-

tracts were signed in the United States; and Greece

provides an accessible forum, as ewidenced by the

action filed in that forum.

(Pet. App. B-64,-65 (emphasis added, footnote omitted):

see also Pet. App. A-31, 34). The Ninth Circuit con-

cluded, therefore, that “[e]ven assuming that the Mar-

idome’s base of. operations was in the Umited States, the

weight of the Lauritzen factors indicates that foreign law

is applicable rather than the Jones Act.”® (Pet. App.

B-66 (footnote omitted) ).

Moreover, the Ninth Circuit did not disregard Peti-

tioners’ claim that the base of operations factor alone was

sufficient to justify application of the Jones Act, i.e., was

dispositive. (Pet. App. B-65). Rather, the Court of

Appeals expressly noted that:

We do not decide today that a United States base of

operations alone cannot ever be dispositive; we sim-

ply conclude that the factors here pointing toward

application of foreign law outweigh the sole factor

arguably militating in favor of applying the Jones

Act.

(Pet. App. B-66). Importantly, both lower courts also

recognized that the base of operations factor was entitled

to less weight in a case such as this one, involving a

non-commercial, recreational vessel. (Pet. App. A-26 n.6;

Pet. App. B-64 (discussing “relevant” factors)). Such

a vessel does not derive any profits from any base of

operations it may have and, thus, does not compete with

United States companies in the manner addressed in

Rhoditis, 398 U.S. at 310. Petitioners ignored this dis-

tinction before the lower courts as they do now in their

Petition.

Second, neither of the lower courts found that either

MML or the Yacht maintained a base of operations in

the United States. As discussed above, the Ninth Circuit

reasoned that, regardless of whether MML had a United

States base of operations, the United States did not have

a sufficient interest for its law to govern Petitioners’

6 The District Court also recognized the importance of the base

of operations factor in the Louritzen/Rhoditis test even though it

too found that the weight of the other factors favored the applica-

tion of foreign law in this case. (Pet. App. A-24, 25).

claims. The Ninth Circuit did not hold, however, that

any such United States base of operations existed. Con-

sequently, the Ninth Circuit’s opinion does not provide

either a factual or legal basis for addressing the “Ques-

tion Presented” by the Petition.

Indeed, the District Court specifically held that it could

not find that MML and/or the Yacht had a base of oper-

ations in the United States. The District Court explained

that “at the time of the accident, none of the Maridome’s

operations were being managed out of the United States.”

(Pet. App. A-32). Even when the Court “examine[d]

the shipowner’s base of operations for the 18 months prior

to the accident, the Court [could not] make a finding that

the Maridome’s base of operations was in the United

States.” (Pet. App. A-33). The District Court also

noted that “[Petitioners] argue that the place where day-

to-day operations are managed is the base of operations.

If this is true, then the base of operations is onboard the

ship itself [sic] Captain Boos managed the dayto-day

[sic] activities of the crew, provisioning the ship, deciding

how to sail where Molina directed, and maintaining daily

account ledgers.” (Pet. App. A-34). Thus, not even the

base of operations—the one factor upon which Petitioners

rely—supports application of the Jones Act.

Contrary to Petitioners’ “Statement of the Case,” the

record supports the holding that MML and the Yacht

had no United States base of operations. (Pet. at 6-12).

Petitioners rest their entire argument that a United States

base of operations existed upon the activities of Peter

Lee from April 1994 to August 1995.7 MML fired Lee

in July 1995 (over a month before the accident) and

required him to terminate his relationship with the Yacht

7 Importantly, although Lee was a United States resident, he was

a New Zealand citizen.

by August 15, 1995.8 Even before his firing, however,

Lee’s role had been diminishing since the hiring of Cap-

tain Boos in February 1995.

Captain Boos was responsible for obtaining food, water,

fuel, other provisions, and cruising permits for the Yacht.

Captain Boos also did all of the hiring and firing of crew

aboard the Yacht. In performing these duties, Captain

Boos answered only to MML representatives in Mexico,

and not to Lee. Thus, even Lee conceded that he had

never controlled Captain Boos with respect to such things

as hirings and that, in 1995, all of his management activ-

ities became subject to approval by people in Mexico.

(C.R. 118(4) at 97, 181). Of course, as captain of the

Yacht, Captain Boos also directed and controlled the

navigation of the Yacht to the various destinations chosen

by Molina in Mexico.

Lee’s primary responsibilities after moving ashore in

March 1994 were simply to collect and forward the

Yacht’s mail, complete the accountings by adding any

shoreside expenses, and send the accountings to MML’s

John Falb in Mexico for approval and funding. In fact,

the financial and accounting activities for the operation

of the Yacht were carried out principally aboard the

Yacht and in Mexico at MML’s offices. The Yacht’s

purser, Captain Boos’s wife, prepared the monthly ac-

countings and forwarded them to MML in Mexico for

approval. When the accounts were approved, MML

transferred funds from Mexico into MML’s NationsBank

account. All the money used for the operation of the

Yacht came ultimately, however, from Molina’s business

8 On August 15, 1995, Lee confirmed his termination and that he

had “advised the various companies that I have been dealing with

that I am no longer representing the yacht... .” (C.R. 128 at 7

(emphasis added) ).

activities and bank accounts in Mexico.® (C.R. 118(1)

at 105; C.R. 118(2) at 59-60; C.R. 120, Exh. 19). The

record plainly supports the District Court’s findings that

the day-to-day operation of the Yacht occurred aboard

the Yacht, Lee handled only month-to-month matters (for

a limited period of time), and Molina, in Mexico, made

the ultimate decisions about how to operate the Yacht.

(Pet. App. A-33).

Third, neither of the lower courts determined that the

Yacht’s British flag was a “flag of convenience.” Both

lower courts recognized that the Yacht flew the British

flag, and neither adopted Petitioners’ argument that the

flag was a flag of convenience. (Pet. App. A-23; Pet.

App. B-64, 66). As those courts implicitly determined,

such a characterization of the Yacht’s British flag is

inaccurate.

The term “flag of convenience” applies to

those flag administrations which both grant national-

ity to foreign-owned ships and have in place suffi-

ciently laissez-faire policies—particularly with regard

to nationality and union affiliation of seafarers—to

ensure that these ships are able to operate at signifi-

cantly lower costs than those flying the “traditional”

flags of the developed States.

Frank L. Wiswall, Jr., Flags of Convenience, in UNITED

STATES SHIPPING POLICIES AND THE WORLD MARKET 107,

108 (William A. Lovett ed., 1996) (emphasis added). See

also David W. Robertson & Paula K. Speck, Access to

State Courts in Transnational Personal Injury Cases:

Forum Non Conveniens and Antisuit Injunctions, 68 TEx.

® Just as before the lower courts, Petitioners claim, without any

support from the record, that MML funded its NationsBank account

from Molina’s assets in the United States. This allegation is simply

incorrect.

a ee

L. Rev. 937, 939 n.12 (1990) (“A ‘flag of convenience’

refers to flying the flag of a country in which an owner

registers a ship to avoid the labor and safety regulations,

fees, and taxes imposed on ships registered in the United

States.”). Contrary to Petitioners’ contention, foreign

ownership alone does not necessarily mark a vessel’s flag

as one of convenience.! (Pet. at 23-24).

Here, the Ninth Circuit implicitly rejected Petitioners’

argument that the Yacht had no contacts with the United

Kingdom and, therefore, the Yacht’s flag was one of con-

venience. The Ninth Circuit noted that a British Channel

Islands company (MML) owned the Yacht, the Yacht’s

hull and protection and indemnity insurance were placed

with insurers in the United Kingdom, and the Petitioners

represented British sailors “whose contracts of employ-

ment were apparently signed within the British Common-

wealth.” (Pet. App. B-66). In addition, the Yacht’s

classification was maintained with Lloyd’s Register, a

British classification society, and the Yacht had complied

with all of the regulatory requirements of the British

Department of Transportation. Finally, of the 65 crew-

members who served aboard the Yacht from March 1993

to December 1996, approximately 40 percent were sub-

10 For example, as one author has commented, “the United States,

in granting U.S. nationality and Flag to 11 Kuwaiti-owned ships

in 1987 during the ‘tanker war’ in the Gulf, was not referred to as

an FoC [i.e., flag of convenience] because the legal and economic

strictures imposed upon U.S.-Flag shipping ensured that these

foreign-owned ships could not operate at Significantly lower costs

than other U.S.-Flag ships.” Wiswall, Flags of Convenience at

108-09.

11 Actually, only two of the seamen signed their articles of em-

ployment in British Commonwealth territories (Barbados and

Gibraltar). The third signed his articles in St. Martin, which is

not a British Commonwealth territory.

jects of the United Kingdom—more than from any other

single country and over three times as many as from the

United States.

Regardless, the British flag has never been considered

a flag of convenience. The United Kingdom is a tradi-

tional maritime nation, which does not maintain an open

registry.12. See generally H. Edwin Anderson III, The

Nationality of Ships and Flags of Convenience: Econom-

ics, Politics, and A!ternatives, 21 Tut. Mar. L.J. 139,

140 n.5, 151-58 (1996). Research has revealed no

United States court decision that has ever recognized

the British flag as a flag of convenience. Moreover, as

the various definitions of this term make clear, it has

significance primarily, if not entirely, in the sphere of

commercial, not recreational, shipping.

Ill. THE NINTH CIRCUIT'S OPINION PROPERLY

BALANCES THE APPLICABLE CONGRESSIONAL

AND JUDICIAL POLICY CONSIDERATIONS.

This case involves claims on behalf of foreign seamen

against a foreign.pleasure yacht and its foreign owner,

which do not implicate any commercial policy, foreign

policy, federalism, or other policy concerns of the United

States. Although Petitioners contend that important poli-

cies require review, they cite no cases from any court in

which the Jones Act has been applied to foreign seamen

serving aboard a foreign, non-commercial vessel, such as

the M/Y MARIDOME. (Pet. at 27-29). Likewise, Peti-

tioners cite no cases that have extended the liberal policies

underlying the Jones Act to such seamen.

12 Notable flags of convenience are: The Bahamas, Barbados,

Belize, Cyprus, Honduras, Liberia, Malta, Marshall Islands, Mauri-

tius, Panama, St. Vincent & The Grenadines, Sri Lanka, and

Vanuatu. Wiswall, Flags of Convenience at 109 & n.6.

i ie

Rather, Petitioners contend initially that the Jones Act

Should be applied to their claims because Respondents

have supposedly accepted “the benefits of basing their Op-

erations in the U.S.” (Jd. at 27). In support of this argu-

ment, Petitioners rely solely upon language from the Dis-

trict Court’s opinion addressing whether MML had sufti-

cient minimum contacts with the United States for the

court to exercise personal jurisdiction over MML. (/d.)

The Lauritzen/Rhoditis test is not, however, a minimum

contacts test. Bilyk, 754 F.2d at 1544. Regardless, the

District Court found further that MML’s various contacts

with the United States did not establish a base of opera-

tions here sufficient for application of the Jones Act even

if they did establish personal jurisdiction over MML.

(Pet. App. A-32, 33, 34).

This Court rejected reasoning similar to Petitioners’ in

Lauritzen:

Respondent places great stress upon the assertion

that petitioner’s commerce and contacts with the

ports of the United States are frequent and regular,

as the basis for applying our statutes to incidents

aboard his ships. But the virtue and utility of sea-

borne commerce lies in its frequent and important

contacts with more than one country. If, to serve

some immediate interest, the courts of each were to

exploit every such contact to the limit of its power,

it is not difficult to see that a multiplicity of conflict-

ing and overlapping burdens would blight interna-

tional carriage by sea.

345 U.S. at 581. The fact that the M/Y MARIDOME

may have had some contacts with the United States, such as

buying goods and services or receiving mail here, does not

provide a basis for applying United States law. In Laurit-

zen and Rhoditis, this Court outlined the factors to be

considered in determining whether a shipowner’s and

vessel’s contacts with the United States require the appli-

cation of the Jones Act, as opposed to the exercise of

personal jurisdiction. As the lower courts properly held,

those contacts are not present here.

Petitioners’ second policy rationale for applying the

Jones Act to their claims is equally unavailing. Petitioners

suggest that this Court should grant review because of the

supposed interests of American seamen—none of whom

was involved in the accident at issue. (Pet. at 27-28).

Whether United States law would have applied to the

claims of an American seaman injured or killed in this

accident is both unknown and irrelevant. The federal

courts have expressly rejected such calls for the applica-

tion of United States law to the claims of foreign seamen

based upon the treatment that might have been accorded

to an American seaman in the same situation:

We know of no authority for the view that foreign

nationals may predicate a right to have American

law applied on the rights of similarly situated Amer-

ican citizens. The suggestion that one follows from

another is another “variety of social jingoism, which

presumes that the ‘liberal purposes’ of American law

must be exported to wherever our multinational cor-

porations are permitted to do business.”

Phillips, 632 F.2d at 89 (citation omitted). See also

Sigalas v. Lido Maritime, Inc., 776 F.2d 1512, 1518-19

(11th Cir. 1985); DeMateos v. Texaco, Inc., 562 F.2d

895, 902 (3d Cir. 1977), cert. denied, 435 U.S. 904

(1978).

Moreover, despite its broad language, “courts have

never applied the Jones Act as broadly as a literai reading

of it would require.” Phillips, 682 F.2d at 84. Instead,

as this Court has held, the Jones Act applies “only to

areas and transactions in which American law would be

considered operative under prevalent doctrines of inter-

national law.” Lauritzen, 345 U.S. at 577. It was, in-

deed, because the Jones Act does not, in fact, apply to

“any seaman” that this Court enunciated the applicable

choice-of-law factors to be considered in evaluating the

claims of foreign seamen under the Jones Act in Laurit-

zen and Rhoditis.

Petitioners’ citation to the 1982 amendment to the

Jones Act (adding subsection (b) to 46 U.S.C. App.

§ 688) as support for this supposed policy rationale does

not withstand scrutiny. (Pet. at 28). Although in de-

bating that amendment some members of Congress ex-

pressed their concern that it would result in the loss of

American jobs, Congress rejected this notion in passing

the amendment. In fact, a number of Congressmen spe-

cifically refuted the idea that the amendment would harm

American workers in any way. 128 Conc. Rec. 25423

(statement of Rep. Biaggi), 25424 (statement of Rep.

Breaux), 25426 (statement of Rep. Boggs), 25427 (state-

ment of Rep. Biaggi) (1982). Thus, the passage of the

1982 amendment, which rejected Petitioners’ reasoning, in

no way supports review in the present case.

Likewise, the fact that the amendment was limited to

foreign seamen employed on the continental shelf of for-

eign nations in the oil and gas industry does not reflect

any policy necessitating review in this case. The House

of Representatives’ debate makes clear that the amend-

ment was tailored to address only that specific situation

and to codify the courts’ prior treatment of the claims of

such workers. Jd. at 25422 (statement of Rep. Biaggi).

Congress left the remainder of cases involving foreign

seamen to be decided by the courts under the multi-factor

Lauritzen/Rhoditis analysis.

Petitioners ask this Court to review the present case,

however, so as to replace this Court’s flexible, multi-factor

choice-of-law test with a single-factor base of operations

test. In doing so, Petitioners demonstrate that their pri-

mary purpose is changing the result in this case and not

in protecting any policy concerns. The strength of the

present Lauritzen/Rhoditis test is that by weighing its

eight factors, as the Ninth Circuit did, courts are

able to address choice-of-law questions in maritime cases

presenting various factual scenarios. As this Court noted

in Rhoditis, the “Lauritzen test, however, is not a me-

chanical one. . . . The significance of one or more

factors must be considered in light of the national interest

served by the assertion of Jones Act- jurisdiction.” 398

U.S. at 308-09 (citations and footnote omitted).

The lower courts, such as the Ninth Circuit here, have

followed this Court’s instruction in Rhoditis in weighing

the Lauritzen/Rhoditis factors in a flexible manner de-

signed to address the peculiar factual and policy situa-

tions presented by different cases. Compare Kukias v.

Chandris Lines, Inc., 839 F.2d 860, 862-64 (1st Cir.

1988) (place of the wrongful act was not a significant

factor and other factors outweighed alleged United States

base of operations where seaman was injured aboard

cruise ship) and Koke v. Philips Petroleum Co., 730 F.2d

211, 218-20 (Sth Cir. 1984), overruled in part on other

grounds by In re Air Crash, 821 F.2d at 1163 n.25

(place of injury and seamen’s allegiance outweighed

United States ownership of vessel and possible base of

operations where seamen were injured aboard semi-sub-

mersible rig). The flexibility of the Lauritzen/Rhoditis

test has also permitted its application beyond the mari-

time personal injury/wrongful death realm to other mari-

time actions as well. See, e.g., Carbotrade S.p.A. v. Bu-

reau Veritas, 99 F.3d 86, 91 (2d Cir. 1996), cert. denied,

520 U.S. 1274 (1997) (misrepresentation); Rainbow

Line, Inc. v. M/V TEQUILA, 480 F.2d 1024, 1026 (2d

Cir. 1973) (maritime liens).

Ultimately, it is apparent that the Ninth Circuit prop-

erly applied and evaluated the eight Lauritzen/Rhoditis

factors in a manner consistent with this Court’s decisions

and those of other circuits. No court has adopted

the inflexible approach Petitioners urge this Court to

adopt. The Lauritzen/Rhoditis test requires no adjust-

ment, in part, because it already permits courts to weigh

factors, such as the base of operations, more heavily

when appropriate. Here, however, as in Lauritzen, the

facts simply provide “no justification for interpreting the

Jones Act to intervene between foreigners and their own

law because of acts on a foreign ship not in our waters.”

Lauritzen, 345 U.S. at 593.

CONCLUSION

Petitioners have failed to demonstrate any conflict

among the lower federal or state courts on the applica-

tion of the Lauritzen/Rhoditis test to warrant review

here. The cases reveal, instead, that the courts consider

all of the factors, according different weight to different

factors depending upon the facts of the case. Moreover,

neither of the lower courts here found that any of the

Lauritzen/Rhoditis factors, including Respondents’ base

of operations, supported the application of United States

law to Petitioners’ claims. Finally, Petitioners have cited

no commercial policy, foreign policy, federalism, or other

policy concern that requires revamping this Court’s choice-

of-law test. Accordingly, Respondents respectfully re-

quest that the Court deny the Petition.

Respectfully submitted,

GEORGE J. KOELZER