# Appendix — Saudi v. Marine Transport Lines, Inc.

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## Record

- **Collection:** Supreme Court brief
- **Document type:** Appendix
- **Published:** January 1, 2004
- **Citation:** 542 U.S. 938

## Text

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Appendix A

In the
"™ited States Court of Appeals
for the Fifth Circuit
DECEMBER 1, 2003

No 02-20235
CAPTAIN SHERIFF SAUDI,
Plaintiff-Appellant,
VERSUS

S/T MARINE ATLANTIC, ETC., ETAL.,

Defendants,

MARINE TRANSPORT LINES, INC.,
OWNER/MANAGER OF THE VESSEL “MARINE ATLAN-
Tic’:

MARINE TRANSPORT CORPORATION,
OWNER/MANAGER OF THE VESSEL “MARINE ATLAN-
=.”

Defendants-Appellees.

* eK KK KK KK KK KK OK OK OK OK K

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N° 02-20563

CAPTAIN SHERIFF SAUDI,
Plaintiff-Appellant,
VERSUS
S/T MARINE ATLANTIC, ETC., ETAL.,
Defendants,
MARINE ATLANTIC LTD.; ACOMARIT
SERVICES MARITIME, S.A.;
OSPREY ACOMERIT SHIP MANAGEMENT, INC.;
KOCH SHIPPING, INC.; KOCH SUPPLY AND
TRADING COMPANY,
Defendants-Appellees.

Appeals from the United States District Court
for the Southern District of Texas
N° H-99-CV-2367

Before SMITH, BARKSDALE, and CLEMENT,
AFFIRMED. See 5TH Cir. R. 47.6.
Circuit Judges.

PER CURIAM:*

* Pursuant to STH Cir.- R- +7.5, the court has deter-
mined that this opinion shor .4 not be published and
is not precedent except under the limited circum-
stances set forth in STH Cir. R 47.5.4.

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-~

Appendix B
IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF TEXAS
HOUSTON DIVISION

Civil Action No. H-99-2367

CAPTAIN SHERIFF SAUDI,
Plainuff
VS.

S/T MARINE ATLANTIC, Her Equipment and Appurtenances,
In Rem (a/k/a M/V Marine Atlantic, Her Equipment and
Appurtenances, In Rem, a/k/a MIT Marine Atlantic, Her

Equipment and Appurtenances, In Rem), MARINE ATLANTIC,

LTD., JOHN DOE COMPANY, Owner of the Vessel Marine
Atlantic. ACOMARIT SERVICES MARITIMES, S.A.,
OSPREY ACOMARIT SHIP MANAGEMENT, INC.,
VALMET- APPLETON, INC., APPLETON MACHINES CO.
(Appleton Marine Division), APPLETON MACHINE CO.,
INC., APPLETON MARINE, INC., JOHN DOE
COMPANY, Designer of the Crane, KOCH PETROLEUM

| GROUP, L. P., JURONG SHIPYARD, LTD. AND UNITED

STATES TATES TRUST COMPANY OF NEW YORK,

Defendants

FINAL JUDGMENT PURSUANT TO FED. R. CIV. P. 54(b)

Pursuant to the Court’s memorandum and order of September
15, 2000 (#222), granting summary judgment in favor of Defen-
dants Koch Shipping Inc. and Koch Supply & Trading Company
Ltd. n/k/a Koch Petroleum Group, L.P., and its memorandum and
order of February 20, 2001, granting summary judgment (#264) in
favor of Defendant Osprey Ship Management, Inc., and because
the Court finds no just reason for delay, the Court hereby
ORDERS that the Clerk of the Court shali enter FINAL

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SUMMARY JUDGM®)\T in favor of Defendants Koch Shipping
Inc., Koch Supply & 7 ading Company Ltd. n/k/a Koch Petroleum
Group, L. P., and Os:srey Ship Management, Inc. against Plaintiff
Captain Sheriff Saudi on all claims against these Defendants, pursu-
ant to Fed. R. of Civ. P. 54 (b) .' Plaintiff shall take nothing and shall
bear all costs of court.

THIS IS AFINAL JUDGMENT.
SIGNED at Houston, Texas, this 10th day of April, 2002.

MELINDA HARMON
STATES DISTRICT JUDGE

' The Court dismissed the following parties without prejudice for lack of
personal jurisdiction: Acomarit Services Maritimes, S.A. (#44, January 31, 2000);
Appleton Marine Inc. and Appleton Machine Company, Inc. (#159, August 31,
2000, finalized #183, October 17, 2000); and Marine Atlantic Ltd. (#237, December
21, 2000). These dismissals were final when the orders were entered, should there be
any question of finality with respect to Captain Saudi’s appeal of the Court’s gntry
of final judgment on partial findings pursuant to Fed. R. Civ. P. 52(c) in favor of
Defendants Marine Transport Lines, Inc. and Marine Transport Corporation against
Plaintiff on all claims that Captain Saudi asserted against these Defendants (#310 &
311, January 24, 2001).

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Appendix C
IN THE UNITED STATES DISTRICT COURT FOR THE
SOUTHERN DISTRICT OF TEXAS HOUSTON DIVISION

CIVIL ACTION NO. H-99-2367

CAPTAIN SHERIFF SAUDI
Plainuff
VS.
S/T MARINE ATLANTIC, Her Equipment and
Appurtenances, In Rem (a/k/a M/V Marine Atlantic, Her
Equipment and Appurtenances, In Rem, a/k/a M/T Marine
Atlantic, Her Equipment and Appurtenances, In Rem), MA-
RINE ATLANTIC, LTD.,. JOHN DOE COMPANY, Owner
ofthe Vessel Marine Atlantic. ACOMARIT SERVICES
MARITIMES, S S.A., OSPREY ACOMARIT SHIP MAN-
AGEMENT., INC., VALMET- APPLETON, INC..
APPLETON MACHINES Co. (Appleton Marine Division), S.
APPLETON MACHINE CO., INC., APPLETON MARINE.,
INC., JOHN DOE COMPANY, Designer of the Crane,
KOCH SUPPLY AND TRADING GROUP, N/K/AKOCH
PETROLEUM GROUP, LL. P. MARINE TRANSPORT
LINES, INC., MARINE TRANSPORT CORPORATION.
JURONG” SHIPYARD, LTD.. AND UNITED STATES
TRUST COMPANY OF NEW YORK,
Defendants

RULE 54(b) FINAL JUDGMENT
Pursuant to the findings of fact and conclusions of law issued by
this Court on this date in support of its oral Rule 52 (c) judgment on
partial findings at trial on January 10, 2002, the Court
ORDERS that FINAL JUDGMENT Is GRANTED in favor of
Defendants Marine Transport Lines, Inc. and Marine Transport Cor-
poration on all claims asserted against them by Plaintiff

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Captain Sheriff Saudi. Plaintiff shall take nothing and shall bear all
costs of court.

THIS ISA FINAL JUDGMENT. SIGNED at Houston, Texas,
this 24th day of January, 2002.

MELINDA HARMON
UNITED STATES DISTRICT JUDGE

Ta

Appendix D
IN THE UNITED STATES DISTRICT COURT FOR THE
SOUTHERN DISTRICT OF TEXAS HOUSTON DIVISION

) CIVIL ACTION NO. H-99-2367

CAPTAIN SHERIFF SAUDI,
Plainuff
VS.

CIVIL ACTION NO. H-99-2367 S/T MARINE ATLAN-
TIC, Her Equipment and Appurtenances, In Rem (a/k/a M/V
Marine Atlantic, Her Equipment and Appurtenances, In Rem,

a/k/a M/T Marine Atlantic, Her Equipment and Appurtenances
In Rem), MARINE ATLANTIC, LTD., JOHN DOE COM-
| PANY, Owner of the Vessel Marine Atlantic, ACOMARIT
| SERVICES MARITIMES, S.A., OSPREY ACOMARIT SHIP
) MANAGEMENT, INC., VALMET- APPLETON, INC.,
| APPLETON MACHINE CO. (Appleton Marine Division),
APPLETON MACHINE CO., INC., APPLETON MARINE,
INC., JOHN DOE ’ COMPANY, Designer of the Crane,
KOCH SUPPLY AND TRADING GROUP, N/K/A KOCH
PETROLEUM GROUP, L.P. MARINE TRANSPORT LINES,
INC., MARINE TRANSPORT CORPORATION. JURONG
SHIPYARD, LTD. AND UNITED STATES TRUST COM-
PANY OF NEW YORK,
Defendants

b]

FINDINGS OF FACT AND CONCLUSIONS OF LAW
SUPPORTING RULE 52(c) JUDGMENT ON PARTIAL
FINDINGS
In the above referenced personal injury/products liability action
in admiralty, Plaintiff Captain Sheriff Saudi’s (“Plaintiff’s” or
“Saudi’s’’) claims against marine Transport Lines, Inc. (“MTL”) and
Marine Transport Corporation (“MTC”) were tried to

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the bench on January 7-10, 2002.' After Plaintiff rested, Defen-
dants orally moved for judgment on partial findings under Federal
Rule of Civil Procedure 52(c), and the Court granted the motion.
Plaintiff was accorded the opportunity to file a post-trial brief by
January 17, 2001, but failed to do so. Therefore the Court now
issues the following findings of fact and conclusions of law support-
ing its ruling.

FINDINGS OF FACT
On May 17, 1999, the date of the accident at issue in this case,
Captain Sheriff Saudi (“Saudi”) was employed by American

' MTL and MTC were the only Defendants remaining that appeared for trial.
On May 17, 2000 the Court granted Plaintiff's motion for default judgment (#91)
against Jurong Shipyard, Ltd., but reserved the question of its unliquidated damages
for trial, where it did not appear. On January 31, 2000 (#44), it granted Acomarit
Services Maritimes, S.A.’s motion to dismiss for lack of jurisdiction. On March 3,
2000 Defendant Koch Petroleum Group L.P. was dismissed without prejudice when
the Court granted Saudi’s motion to nonsuit that entity (#62). After allowing sub-
stantial time for discovery, on September 5, 2000, the Court granted Appleton
Marine Inc. and Appleton Machine Company, Inc.'s (“the Appleton Defendants”’)
renewed motion to dismiss for lack of personal jurisdiction and United States Trust
Company of New York’s (“U.S. Trust’s”) motion for summary judgment (#159).
The Appleton Defendants’ dismissal was finalized on October 17, 2000 (#183),
while a Rule 54(b) final summary judgment in favor of U.S. Trust was entered on
December 19, 2000 (#230). Pursuant to a stipulation of all parties, Valmet, Inc. was
dismissed on October 26, 2000 (#186). On December 15, 2000, the Court granted
Koch Shipping, Inc. and Koch Supply & Trading Company, Ltd. n/k/a Koch Petro-
leum Group, L.P.’s motion for summary judgment (#222). On December 21, 2000,
the Court dismissed Marine Atlantic Ltd. for lack of personal jurisdiction (#237) .
Finally, on February 20, 2001, the Court granted osprey Ship Management, Inc.'s
motion for summary judgment (#264).

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Eagle Tankers.’ Koch Petroleum Group L.P. (“Koch”) had char-
tered the ST MARINE ATLANTIC from its owner, Marine Atlan-
tic Ltd. American Eagle Tankers, in accordance with a contract it
had with Koch, had furnished Saudi, an experienced mooring mas-
ter and a licensed mariner, who was acting in that capacity during
the traditional maritime activity ofa lightering operation, to help in
lightering operations involving the ST MARINE ATLANTIC in navi-
gable international waters of the Gulf of Mexico. Saudi was being
transferred from the ST MARINE ATLANTIC to a small tender
vessel, the M/V AMERICAN DISCOVERY, in a personnel bas-
ket by means of a portside cargo hose crane affixed to the ST
MARINE ATLANTIC, when a splined-shaft coupling between the
motor/brake unit and the luffing winch in that crane failed. Up until
that time, there was no indication of any problems in the splined
shaft couplings in any of the cargo hose handling cranes on the ST
MARINE ATLANTIC or its sister ship, the ST MARINE PA-
CIFIC.’ Because of the failure of the ST MARINE ATLANTIC’s
portside crane’s coupling, the crane collapsed, dropping Saudi and
the basket about fifty feet into the water, and the crane and its wires
fell on top of him and severely injured him.

In determining whether MTL and/or MTC is liable, the Court
examined the history of the vessel up to the time of the

* American Eagle Tankers was never a party to this suit.

‘There was evidence that a hydraulic motor on the starboard crane failed in the
fall of 1995, but there was no evidence that it had anything to do with the splined
shaft coupling at issue here.

accident.

The ST MARINE ATLANTIC was originally known as the
UST ATLANTIC, although none of the witnesses at trial was cer-
tain of, nor did the documentary evidence explain, the reason. A
crude oil carrier that is still one of the largest in the world, the vessel
was built under full survey to meet the rules of the American Bureau
of Shipping (““ABS”)* by the Newport News Shipbuilding and Dry-
Dock Company (“Newport News’) in Newport News, Virginia.
Richard Farman, MTL’s Technical Director during the relevant pe-
riod, testified that the vessel was originally built under the auspices
of the United States Coast Guard to 21! under the United States
flag. Greg Doyle, chartering manager for MTL International Ship
Management, Inc. (“ISM”), to be discussed infra, stated that the
designs of the cranes constructed for the vessel were submitted to
the United States Coast Guard and approved.

During construction Newport News installed two cargo hose
handling cranes, designed and manufactured by Appleton Marine
Division of the Appleton Machine Company of Appleton, Wiscon-
sin, manual, a copy of which was kept on the vessel. Defs.’ Ex. 30.

* As reflected in the record and the trial evidence, the ABS develops rules,
standards and guidelines for the design, construction, and operational maintenance of
vessels, provides classification services, and keeps records for vessels “in class.” A
classification by ABS reflects that a vessel is structurally and mechanically fit for a
particular use or service according te ABS’ rules and standards. Insurance companies
generally require such classification before insuring a vessel and major oil companies,
before chartering it for use. After its construction, the vessel in dispute here was
classified by the ABS as 11+A1 (E) Oil Carrier.” .

lla

The cranes, one mounted on the starboard side and one or. the
port side of the vessel, were each rated as having the capacity to
bear fifteen metric tons safely. The vessel was delivered by New-
port News to iis original owner, most likely the Shell Oil Company
or one of its affiliates, in 1979 and was first managed by the
Interocean Management Corporation (“Interocean”’) of Philadel-
phia, Pennsylvania.

For thirteen years, from approximately August 1981 until July
1994, the vessel was taken o it of service and anchored in Labuan
Bay, on the coast of Sabah, Eastern Malaysia under the care of BP
Shipcare, which is in the business of providing long-term care to
tankers in lay-up. In February 1994, Marine Atlantic Ltd., a Liberian
corporation, purchased the vessel, transferred it from United States
registry to Liberian, and renamed it the ST MARINE ATLANT x.

MTLis a subsidiary of MTC. Defs. Ex. 45, Telefacsimile from
Peter N. Popov, General Counsel of MTC. Around February 15,
1994 ISM,” a special purpose subsidiary of MTL, contracted with
Marine Atlantic Ltd., the new owner of the ST MARINE ATLAN-
TIC, to operate and manage the vessel.

The issue of ownership of the vessel has been implicitly raised
by Plaintiff's suing a large number of Defendants with names con-
taining the word “Marine.” Defendants have argued that the April
1998 edition of the Register of International Shipowning

> ISM was also never sued in this action.

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Groups erroneon'sly indicated that the ST MARINE ATLAN-
TIC and her sister ship, the ST MARINE PACIFIC, were owned
by ISM. Long before the accident at issue here, Peter Popov sent a
letter dated August 13, 1998 to the Register of International
Shipowning Groups and the Tanker Advisory Center to correct the
muisiziformation. Defs.’ Ex. #45. Plaintiff has not controverted the
corrected information presented in that letter, which the Court now

Popov’s letter explains that ISM is an indirect, Liberian subsid-
iary of MTL and was organized in January 1994. In February 1994,
Marine Atlantic Ltd. bought the ST MARINE ATLANTIC, while
Marine Pacific Ltd. purchased the sister vessel, the ST MARINE
PACIFIC. Id.°

Following the purchases of the vessels, ISM took over the tecn-
nical operation of both vessels; MTL International Tankers, Inc.
(another indirect Liberian subsidiary of MTL organized in January
1994) began commercial management of the two vessels; and MTL
assumed the accounting duties. Id. The contract between MTL and
Marine Atlantic Ltd. was terminated by Marine Atlantic Ltd. on
December 12, 1995 (Defs.’ Ex. #51), and ISM stopped operating
and managing the vessel on January 29, 1996, when ISM delivered
the two vesseis to its successor, Acomarit Services Maritimes, S.A.
(“Acomanit’). Ex. 1 to Popov Affidavit. MTL’s accounting duties

° Popov’s letter indicates that the stock of the two purchasers was owned by
Monte Christo Shipholdings, Ltd. On February 16, 1994 MTL acquired a small
minority position in Monte Christo. MTL sold that stock on March 21, 1996 and
has since had no interest in Monte Christo, Marine Atlantic Ltd., Marine Pacific
Ltd., or either of the sister vessels.

ee ee ee ee ee

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with respect to the ST MARINE ATLANTIC ended several months
after the vessels were delivered to Acomarit, three years before
Saudi’s injury on May 17, 1999. Popov states that at the time he
was writing the letter, Acomarit was the technical manager of both
ships, and Defendants’ counsel currently represents that it still is;
Salisbury House, Inc. of Brookline, Massachusetts was performing
the commerciai management; Marine Atlantic Ltd. continued to own
the ST MARINE ATLANTIC ; and Marine Pacific Ltd. continued
to own the ST MARINE PACIFIC. Id.’

The evidence at trial showed that while the ST MARINE AT-
LANTIC was anchored in Labuan Bay, qualified representatives of
MTL and ISM visited the vessel and prepared a “reactivation speci-
fication” to identify what would have to be done to bring the vessel
up to trading standards and to determine if reactivation would be
worthwhile. Richard Farman was among those hired by MTL to
inspect the vessel for possible reactivation, and he testified from
personal knowledge about the evaluation process. Because there
was little prior history for the vessel, since it had only operated from
1979-81 before being deactivated for thirteen years, to insure that
the reactivation specifications would encompass all

’ Moreover, in the course of this litigation Marine Atlantic Ltd. came forward
identified itself as the owner of the ST MARINE ATLANTIC at the relevant times.
That admission was the basis for the summary judgment granted in favor of U.S.
Trust Company of New York (#159 and 230), which Plaintiff had sued apparently
because the vessel was initially known as the UST Atlantic. When Plaintiff contin-
ued to pursue and harass U.S. Trust Company of New York without any showing of
objective evidence to support his suit, this Court imposed monetary sanciivris on
Plaintiff.

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necessary refurbishment, they investigated the following available
sources of information. The MTL and ISM representatives asked
the initial vessei manager, Interocean, and caretaker during deacti-
vation, BP Shipcare, if they were aware of any problems in connec-
tion with the operation and use of the cranes and of any mainte-
nance done on the cranes. They reviewed all reports generated by
BP Shipcare to identify any problems or faults. Moreover, because
the sister vessel, ST MARINE PACIFIC, had been reactivated
eighteen months earlier, they reviewed all records of problems it
had experienced to be included in reactivation work on the ST
MARINE ATLANTIC. Defs.’ Ex. 25. They also reviewed the crane
manual for specific information about inspection, maintenance, and
lubrication required for the cranes.

Significantly, the crane manual did not verbally mention the
splined-shaft coupling in dispute here; the only “reference” to t was
its inclusion as a part of the crane in a single diagram and its identi-
fication as a coupling in the index. Moreover, as reflected in the
evidence, because of the design of the crane, the coupling was not
immediately nor easily visible; it was hidden behind a bolted metal
plate. Even if the plate were removed, to inspect the four-inch-long,
two-to-three-inch-diameter coupling in the crane, one would have
to remove the splined shafts from it by unbolting and removing sub-
stantial parts or all of the luffing winch assembly on one side or of
the motor/brake assembly on the other. Even if it had been exposed
to view, the coupling, itself, gave no notice that lubrication might be
needed: it was designed

lSa

and installed without a grease fitting or nipple or any other device
that would permit lubrication of the inside of the coupling where it
touches the splined shafts. The design also did not suggest there
were moving parts within the coupling. In fact, Richard Farman,
MTL’s very knowledgeable Technical Director, credibly testified
that the coupling was not designed tv inove, but was designed to be
locked in position and have no friction within it. He stated that it was
designed to act as one with the shaft and not to have internal moving
parts or require lubrication. That information was not controverted
by any evidence submitted by Plaintiff. Nor did the crane manual
instruct that the coupling needed periodic inspection, lubrication, or
any G. er type of maintenance. Indeed there is no evidence that
anyone knew of the existence of or location of the coupling or of the
need for maintaining it before Saudi’s accident on May 17, 1999,
nor is there any evidence of any other such coupling failing in similar
cranes from the same manufacturer.* Indeed all the evidence sug-
gests that the failure of the coupling was an unpredictable freak
accident.

In sum there was no history or indication from Interocean, BP
Shipcare, the sister ship ST PACIFIC MARINE, the operating his-
tory of the ST MARINE ATLANTIC, the manual, or the

* Greg Doyle testified that normally a vessel repairman relies on the
manufacturer’s manual for maintenance instruction. He corroborated Farman’s testi-
mony that neither the manual nor the design nor any problem with the equipment
alerted the reactivators to a need for maintenance of the coupling.

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design of the coupling that the splined-shaft coupling was a source
of any problems that should have alerted anyone to inspect, modify,
service, or maintain the coupling either during the reactivation nor
afterward, prior to Saudi’s accident.

After bids were solicited from shipyards in Southeast Asia, the
reactivation contract was awarded to Keppel Shipyard, a division
of Keppel Corporation Ltd. (““Keppel’”),’ and the ST MARINE
ATLANTIC was towed to Keppel’s Singapore shipyard for the
work. Richard Farman, with his substantial experience, described
Singapore as “probably the premier ship repair port in the world”
and Keppel as “the number one or two” shipyard there. The
drydocking and reactivation took approximately seven months, from
July 1994 until January 1995, ata cost of several million dollars.

Keppel and its subcontractors inter alia made numerous modi-
fications and refurbished substantial parts of the vessel, including
installation of a new incinerator, crude oil washing machines, tank-
level gauging and temperature monitors, valve remote systems in-
volving the refurbishment of more than ten miles of hydraulic tubing,
remote pressure monitoring for cargo system, an alarm monitoring
system, boiler management system, scrubbing tower, antifouling sys-
tem, retrofit of inert gas system, boiler tube modifications, adding
underwater hull markings, hull repair, modification of the distilled
water tank, shaft seal changes, and boiler heater fabrication.

° Keppel has not been sued in this action.

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During the reactivation, the owner, Marine Atlantic Ltd., paid

three independent contractors, who were not employees of ISM or

MTL, to function as Marine Atlantic Ltd.’s representatives to moni-

tor the reactivation to insure that the work performed was accord-

ing to specification and appropriate standards and that it was prop-

erly and timely accomplished. The three representatives did not

| perform any hands-on work in any of the modifications, replace-

ments, and repairs during the reactivation, but met daily with Keppel

managers, observed the work being performed, and assessed

whether the charges were appropriate. They could also authorize

additional work beyond that specified in the reactivation contract if

the need arose, but no evidence was presented that they did. These

three independent contractors reported daily to MTL’s Richard

Farman, who testified that he was responsible for managing the re-

activation from his office in Weehawken, New Jersey. The three

representatives also sent invoices for their services to MTL, which

arranged for payment from a bank account funded by Marine At-
lantic Ltd.

The very credible testimony of Richard Farman, MTL’s Tech-
nical Director, was the only evidence relevant to the issue of whether
MTL is liable, other than the far less comprehensive testimony of
Greg Doyle, the chartering manager of ISM, which did not contra-
dict Farman’s testimony. Farman explained that because of the re-
activation and the fact that the vessel, newly purchased by Marine
Atlantic Ltd., a Liberian corporation, would be under Liberian reg-
istration and carrying the Liberian flag, certain tests

18a

and statutory trading certificates were required. These surveys,
i-e., inspections, were not carried out by Liberia, but by classifica-
tion societies that certify that particular inspections have been done.
A vessel cannot carry on trade without such trading certificates in
force. Indeed, the history of inspections of the ST Marine Atlantic
reflects reasonable and prudent care of the vessel under the circum-
stances.

In December 1994, both cargo hose handling cranes were load
tested to 18.75 metric tons (125% of their safe working load of 15
metric tons) by Keppel, as witnessed by an ABS surveyor and one
of the owners’ representatives. Both Keppel and ABS certified the
load test and provided the certificates to MTLin Weehawken, New
Jersey. Defs.’ Ex. #49. The vessel left the Keppel Shipyard and
completed sea trials in January 1995 and was rated “in class.”

The ABS, acting as a classification society and on behalf of
Liberian authorities, conducted regulatory and statutory surveys
throughout the reactivation and issued various certificates, as re-
quired before the ST MARINE ATLANTIC would be able to
trade.'° The ADS performed surveys and inspections of the vessel
in dry docking, a tail-shaft survey, an annual survey of hull, an an-
nual load line inspection, an annual survey of machinery, an annual
survey of automation, an annual survey of inert gas system, a

(0 Richard Farman testified that ABS inspects all critical parts of the vessel, but
it does not require the breaking down of all parts. If a problem is noticed, ¢.g.,
overheating, untoward noises or abnormal movement, the inspector has the discre-
tion to determine whether a breakdown of a particular part or system is needed.

he als «ie Soot.

ne

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special survey of machinery, a special survey of automation, a spe-

cial survey of inert gas system, a port main water tube survey, a
starboard main water tube boiler survey, a gauging report, anda
tonnage confirmation survey. The ABS also performed surveys foi
safety construction, safety equipment, safety radio and international
loadline. It performed a condition assessment survey and rated the
cargo hose handling crane as “Grade 1,” meaning “Condition supe-
rior in all respects; very well maintained; a condition of unimpaired
orginal strength and/or efficiency; no maintenance or repair required.”
Defs.’ Exs. #41, p. 5, item 4 and #31, 46,47, 48.

When the reactivation was nearly completed, Marine Atlantic
Ltd. contracted with Clyde Marine of Glasgow, Scotland to furnish
officers and crew, all employees of Clyde Marine, for the vessel.
Thus the regular maintenance of the vessel in January 1996 became
the responsibility of the chief engineer and officers on the vessel.
Clyde Marine’s invoices were paid from a bank account funded by
Marine Atlantic Ltd.

Furthermore, after Acomarit took over as manager in January
1996, the port cargo hose handling crane on the ST MARINE AT-
LANTIC was load-tested off the United Arab Emirates three times
before Saudi’s accident. In November 1996, it was weight-tested
to 18.20 metric tons under the observation of an ASS surveyor,
who issued a certificate. Defs.’ Ex. 32. In March 1998, both hose
handling cranes were serviced and load tested offshore of Dubai
and ‘the portside crane was load-tested to 18.75 metric tons. Defs’
Ex.

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17, 18. On March 3, 1998 Claymore Security and Safety Consult-
ants issued a certificate attesting to its weight-bearing capacity. Defs.’
Ex. #20. In December 1998 during a special survey and docking
survey of the ST MARINE ATLANTIC in Singapore, both cranes
were load-tested and certified by Jurong Shipyard Ltd., while the
load test was also witnessed and certified by an ABS surveyor.
Defs.’ Exs. 22, 15. In addition, Thomas Garrett, an inspector with a
special interest in cranes, acting on behalf of a major oil company,
performed a vetting inspection aboard the vessel in early 1997 that
included extensive operational tests of both cranes. The manual was
also examined. No substandard condition of the internal mecha-
nisms of the cranes was discovered, nor were there any unusual
noises or vibrations that might have alerted an inspector to the need
for the inspection, maintenance, repair or replacement of any crane
part. Finally, before Koch or an affiliate chartered the vessel, it hired
PacMarine Services of Singapore to conduct an on-hire survey in
January 1999 while the vessel was anchored off Singapore. Defs.’
Ex. 29. The survey specifically reported, “Crane structures noted in
apparent sound condition and both cranes in working condition.”
Id. at 00242.

At tnal Plaintiff produced the clearly corroded coupling, which
was cut apart for removal and damaged in the process, as demon-
strative evidence, as well as a photograph (Plaintiff’s Ex. 90) taken
of it after its removal following the accident. Richard Farman testi-
fied that he believes corrosion caused the crane’s boom arm to fall.
Nevertheless, Plaintiff did

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not demonstrate that the condition of the coupling was dangerous
or required refurbishment or prophylactic maintenance from 1994-
96, the period when MTL had some factual or legal relationship to
the ST MARINE ATLANTIC. Moreover, as Farman credibly ex-
plained, because neither the manual nor the design of the portion of
the crane covering the crane indicated that the coupling existed and
required greasing, and because there was no known problem that
would have alerted the refurbishers to look for it, no maintenance
could reasonably have been expected.'' Farman further observed
that he did not know how one could test it in its normal working
position and condition. Indeed, the coupling had to be cut in half to
remove and inspect it after the accident and it was damaged in the
process.

MTC and MTL owed no legal duty of care to Plaintiff given .the
circumstances of this case. Plaintiffhas failed to show that MTC
had any involvement with the ST MARINE ATLANTIC, no less a
relationship that would have given rise to a duty of care and poten-
tial exposure to liability from Saudi. There is no evidence in the
record that MTL owned, operated or chartered the ST MARINE
ATLANTIC, or that it employed Plaintiff. The evidence demon-
strates that MTL’s limited management role relating to the ST MA-
RINE ATLANTIC on behalf of the owner, Marine Atlantic Ltd.,
related to

'' Farman, the only trial witness knowledgeable about the reactivation and the
design of the crane, stated that he could not tell how much corrosion would have been
present in 1994. He further stated that at that time neither he nor anybody else knew
that the coupling existed behind the steel plate and that to the best of his knowledge,
the coupling was not disassembled.

22a

Farman’s management from New Jersey of three independent
contractors at the Keppel Shipyard monitoring reactivation of the
vessel from 1994-96, and to ministerial accounting actions of pay-
ing Marine Atlantic Ltd.’s employees. During reactivation, MTL was
responsible for having invoices from Keppel and from the ST MA-
RINE ATLANTIC’s new officers and crew, provided by Clyde
Marine, paid from accounts funded by Marine Atlantic Ltd. No
MTL employee had any hands-on or physical involvement in the
repairs, modifications, and reactivation of the vessel.

CONCLUSIONS OF LAW

This Court has admiralty or maritime subject matter jurisdiction
over this action under 28 U.S.C. 1333(1), giving federal district
courts “original jurisdiction ... of... [a]ny civil case of admiralty
jurisdiction.” This Court has admiralty jurisdiction over a tort action
where the alleged tort occurred on or over navigable waters and
where the activity giving rise to the incident had a substantial rela-
tionship to traditional maritime activity such that the incident had a
potentially disruptive influence on maritime commerce. Jerome B.
Grubart, Inc. v. Great Lakes Dredge & Dock Co., 513 U.S. 527,
531-32 (1995); Hufnagel v. Omega Service Industries, Inc., 182
F.3d 340, 351-52 (Sth Cir. 1999). Where an injury occurs on navi-
gable waters of the United States because of defective repairs that
were made on land, the matter falls within admiralty jurisdiction.
Todd Shipyards Corp. v. Turbine Service, Inc.., 467 F. Supp. 1257,
1295 (E.D. La. 1978),

23a

aff'd in part, modif’d in part, and rev’d in part, 675 F.2d 401
(Sth Cir. 1982), cert. denied, 459 U.S. 1036 (1982).

Regarding a judgment on partial pleadings, Federal Rule of Civil
Procedure 52(c) provides,

If during a trial without a jury a party has been
fully heard on an issue and the -court finds against
the party on that issue, the court may enter judg-
ment as a matter of law against that party with
respect to a claim or defense that cannot under the
controlling law be maintained or defeated without a
favorable finding on that issue, or the court may
decline to render any judgment until the close of all
the evidence. Such a judgment shall be supported
by findings of fact and conclusions of law as
required by subdivision (a) or this rule.

The Advisory Committee Notes state, regarding the 1991 Amend-
ment that added (c) to the rule, that “ [i] t authorizes the court to enter
judgment at any time that it can appropriately make a dispositive
| finding of fact on the evidence.” Moreover the notes make clear,

Judgment entered under this rule differs from a
summary judgment under Rule 56 in the nature of
the evaluation made by the court. A judgment on
partial findings is made after the court has heard all
the evidence bearing on the crucial issue of fact,
and the finding is reversible only if the appellate court
finds it to be “clearly erroneous.” A summary judg-
ment, in contrast, is made on the basis of facts es-
tablished on account of the absence of contrary
evidence or presumptions; such establishments of
fact are rulings on questions of law, as provided in
Rule 56(a) and are not shielded by the “clear error’
standard of review.

ee So ea ee Ow ee Pee

The district court need not consider the evidence in a light fa-
vorable to the plaintiff, but instead may issue a judgment in

24a

favor of the defendant if it determines that the plaintiff's evidence is
insufficient to make out a claim. Geddes v. Northwest Missoun State
University, 49 F.3d 426, 429 n.7 (8th Cir. 1995). Furthermore,
when the district court’s findings involve a determination regarding
credibility of a witness, Rule 52 requires “even greater deference
to the trial court’s findings.’” Samson v. Apollo Resources, Inc.,
242 F.3d 629, 632-33 (Sth Cir. 2001 )) quoting Anderson v. City of
Bessemer City. N.C., 470 U.S. 564, 574 (1985)), cert. denied,
122 S. Ct. 63 (2001) . The district court’s findings of fact are re-
viewed for clear error, its conclusions of law are subject to de novo
review, while its evidentiary rulings are reviewed for “abuse of dis-
cretion.” Id.

Admiralty law recognizes causes of action fur negligence and
products liability, including strict liability. East River S.S. Corp. v.
Transamerica Delaval, Inc., 476 U.S. 858, 865 (1986).

The Restatement (Second) of Torts 402A provides as follows
a cause of action for strict products liability:

(1) One who sells any product in a defective
condition unreasonably dangerous to the user or
consumer or to his property is subject to liability for
physical harm thereby caused to the ultimate user
or consumer, or to his property, if (a) the seller is
engaged in the business of selling such a product,
and (b) it is expected to and does reach the user or
consumer without substantial change in the condi-
tion in which it is sold.

Comment (f) to § 402A states, “The rule does the occasional
seller... of products who is not engaged in that

25a

activity as part of his business.”

MTC and MTL are not strictly liable to Saudi for his injuries.
Section 402A is not applicable to MTC and MTL because they
were not sellers of the crane or its coupling and were not engaged in
the business of selling such a product. MTL manages services.

In maritime tort cases, the Fifth Circuit applies general prin-
ciples of, negligence law. Daigle v. Point Landing, Inc., 616 F.2d
825, 827 (Sth Cir. 1980) . Aduty of care may arise under general
maritime law from the application of reasonableness and prudence
to existing circumstances. Coumou v. United States, 107 F.3d 290,
295-96, withdrawn and superseded in part on reh’g, 114 F.3d 64
(Sth Cir. 1997). Anegligence cause of action in admiralty requires a
plaintiff to prove the same elements for negligence as those under
common law: (1) the existence ofa duty of care owed by the defen-
dant to the plaintiff; (2) breach of that duty of care; (3) a causal
connection between the offending conduct and the resulting injury;
and (4) actual injury suffered by the plainuff Thomas J. Schoenbaum,
Admiralty and Maritime Law 5-2 at 170 (3d ed. 2001). In Daigle,
616 F.2d at 827, the Fifth Circuit quoted the following from 57 Am.
Jur.2d Negligence 72 at 423 (1971):

[T]he care which must be exercised in any par-
ticular situation is in proportion to the actor’s knowl-
edge, actual or imputed, of the danger to another in
the act to be performed. The degree of care neces-
sary to constitute the ordinary care required of a
person upon any particular occasion is measured
by reference

26a

to the circumstances of danger and risk known to
such person at the time. ...

Negligence is only actionable ifit is a “legal cause” of the plaintiff's
injuries. Tidewater Manin, Inc. v. Sanco Intern., Inc., 113 F. Supp.2d
987, 998 (E.D. La. 2000), citing Donaghey v. Ocean Drilling Ex-
ploration Co., 974 F.2d 646, 648 (Sth Cir. 1992). ““Legal cause is
something more than ‘but for causation.’” Id., quoting Donaghey,
974 F.2d at 648 (quoting Thomas v. Express Boat Co., Inc., 759
F.2d 444, 448 (Sth Cir. 1985)). Therefore the defendant’s negli-
gence must be a “‘substantial factor” in bringing about -the injury. Id.
“Substantial factor’ mp.
18,1. 6.:

Mr. Nork"*: So we can agree, any questions you
want to ask, please ask. I’1l make the same objec-
tion I just made and I’]] ask madame court reporter
to certify this question o: make a mark on this ques-
tion. I think the most expeditious way to resolve
this is Mr. Hamshaw can furnish the answers later
to the best of his knowledge and we will furnish
them to the Court in camera so she can decide
whether they are relevant.

Mr. Izen: And they will be there for appeal. That’s
fine by me.

During the deposition Hamshaw declined to answer two ques-
tions: (1) “Who were the investors you were representing?” (Ex. 2
at p. 17, 11. 5-6); and (2) “Does (Julio Mario Santo Domingo]
have anything to do with financing vessels or any interest in any
vessels that you know of?” (Id. at p. 61, 11. 13-13). According to
the parties’ agreed procedure, the Court in camera reviewed an
affidavit filed by Hamshaw answering the questions and concluded
in its order of December 20, 2000 that there was no valid basis for 3
ordering resumption of his deposition or disclosure of the contents =
ot Hamshaw’s affidavit because the contents would not help Plain-
tiff demonstrate personal jurisdiction over Marine Atlantic Ltd.

is hon realtek oltre acs 0

Nor insists Marine Atlantic Ltd. did the Court commit

'S Counsel for Marine Atlantic Ltd.

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69a

irreversible error by refusing to order Hamshaw to produce the
documents Saudi seeks. Marine Atlantic Ltd. points out that the
deposition notice with a purported subpoena duces tecum, received
by Hamshaw on November 6, 2000, did not notice Hamshaw as a
corporate representative of Marine Atlantic. The Court’s order of
December 20, 2000 clearly stated, ‘““Hamshaw, who was not de-
posed as a corporate representative of any of the Defendants, can-
not be compelled to provided documents which are neither in his
possession nor under his control.” Thus the subpoena duces tecum
was. not enforceable. Marine Atlantic Ltd.-alternatively argues that
if Hamshaw was a party deponent, he had thirty days to respond to

the subpoena, which would have extended the production date be-

yond the discovery deadline. Furthermore, it notes, the majority of
the documents were first demanded in Saudi’s motion to compel on

December 1, 2000, the last day of discovery. The Court’s order on

December 20, 2000 stated, “To the extent Plaintiff seeks docu-
ments with the foregoing motion which were not identified in the
subpoena duces tecum to Hamshaw, such document requests come
too late, on the expiration of the discovery deadline.”

Furthermore, insists Marine Atlantic Ltd., Doyle’s deposition
transcript does not demonstrate that he was an agent of Marine
Atlantic Ltd. located in the United States. Outside of the single in-
stance when Doyle was involved in executing a contract between
Salisbury House and Marine Atlantic, Ltd, Saudi presents

70a

no evidence that any work by Doyle pursuant to that contract oc-
curred in the United States or that Doyle’s work under that con-
tract, if any, was other than work typically undertaken by an inde- -
pendent contractor. Saudi has presented no evidence of any agency
relationship between Doyle and Marine Atlantic Ltd. Although Saudi
tries to show, as a contact of Marine Atlantic Ltd. with the United
States, work performed by Doyle in negotiating shipyard contract
issues relating to the Marine Atlantic when Doyle was employed by
M.T.L. Tankers in Singapore, that work occurred years before Doyle
started Salisbury House, Inc. in Massachusetts. Ex. 3, Doyle Dep.
at p. 140, 11. 13-18; p. 141, 1. 7—p. 142, 1. 25; p. 44, 11. 6-10.
Doyle testified that when he negotiated the shipyard contract in.
Singapore, he did not have a contract with Marine Atlantic and that
he did not think he had specific authority to negotiate for Marine
Atlantic Ltd. Ex. 3, Dep. of Doyle, at p. 149, 1.15—p. 150, 1. 8.
Furthermore, that negotiation in Singapore occurred while Doyle
worked for a different company. Thus Saudi fails to show that Doyle
acted as an agent for Marine Atlantic Ltd. in the United States and
thus fails to support Rule 4(k)(2) jurisdiction.

After reviewing the record, the Court finds itself in complete
agreement with Marine Atlantic Ltd. and thus denies the motion for
rehearing.

E. Instrument #265

Plaintiff has filed cross motion for sanctions (#265) against U.S.
Trust. Because, as indicated above, the Court has rejected his ar-
guments in the above motions, and because the Court finds there
are numerous misrepresentations in that motion for sanctions, the
Court denies the cross motion for sanctions.

F. Instrument #266

Defendants Acomarit Services Maritimes S.A. (““Acomarit’),
Marine Atlantic Ltd., and Osprey Ship Management Inc-.’s motion
for entry of final judgment ..(#266.).) under Rule 54(b) states that it
is opposed, but no opposition has been filed. The Court has dis-
missed both Acomarit and Marine Atlantic Ltd. for lack of personal
jurisdiction. It has also, in two separate orders, granted Osprey
summary judgment on Plaintiff’s Jones Act, unseaworthiness, and
common-law and maritime negligence claims.

Because trial is imminent on the few remaining claims, and there-
fore a complete final judgment will issue in the near future, the Court
denies the motion.

In sum the Court

ORDERS the following:

(1) All Plaintiff's and the Izens’ motions for rehearing (#242,
244, 245, and 246) are DENIED;

(2) Plaintif?’s cross motion for sanctions (#265) is DENIED;

72a

(3) Defendants Acomarit Services Maritimes S.A.
(““Acomanit”), Marine Atlantic Ltd., and Osprey Ship
Management Inc.’s. motion for entry of final judg-
ment (#266) under Rule 54(b) is DENIED; (4)
Defendant U.S. Trust’s motion for sanctions and to
strike (#260) the Izens’ supplement to motion for
new trial and trial exhibit to their motion is DENIED
and (5) the Court hereby ADOPTS the magistrate..
judge’s memorandum and recommendation (#262)
as its own, OVERRULES Plaintiffs objections and
exceptions to #262, and GRANTS in large part
Defendants’ joint motion to strike (#220) Plaintiff's
expert witnesses, as indicated above and in the
magistrate’s memorandum and recommendation
(#262).

SIGNED at Houston, Texas, this 23 day of
July, 2001.

MELINDA HARMON
UNITED STATES DISTRICT JUDGE

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Appendix G
IN THE UNITED STATES DISTRICT COURT FOR THE
SOUTHERN DISTRICT OF TEXAS HOUSTON DIVISION

CIVIL ACTION NO. H-99-2367

CAPTAIN SHERIFF SAUDI,
Plaintiff
VS
S/T MARINE ATLANTIC, He Equipment and Appurtenances,
In Rem (a/k/a M/V Marine Atlantic, Her Equipment and Appur-
tenances, In Rem, a/k/a M/T Marine Atlantic, Her Equipment
and Appurtenances, In United States Courts Rem), MARINE
ATLANTIC, LTD., Southern District of JOHN DOE COM-
PANY, Owner ofthe Vessel Marine Atlantic, ACOMARIT
SERVICES MARITIMES, S.A., OSPREY ACOMARIT SHIP
MANAGEMENT, INC., VALMET- Michael N. Milby, Clerk
of Court APPLETON, INC., APPLETON MACHINES CO.
(Appleton Marine Division), APPLETON MACHINE CO.,
INC., APPLETOiv MARINE, INC., JOHN DOE COM-
PANY, Designer of the Crane, KOCH PETROLEUM GROUP,
L.P., JURONG SHIPYARD, LTD. AND UNITED STATES
TRUST COMPANY OF NEW YORK,
Defendants

MEMORANDUM AND ORDER

Pending before the Court in the above referenced admiralty
and maritime personal injury action, arising from the May 17, 1999
fall of Plaintiff Captain Sheriff Saudi (“‘Plaintiff’ or “Saudi’”’) from a
lifting basket as he was transferred from the tanker Marine Atlantic
to the M/V American Discovery because of the collapse of an al-
legedly defective portside crane on the tanker Marine Atlantic, is
Defendant Osprey Ship Management, Inc.’s

74a

(“Osprey’s’”’)' motion for summary judgment (#151).

The movant seeking a federal summary judgment initially must
inform the court of the basis for its motion and point out those por-
tions of the pleadings, depositions, answers to interrogatories, and
admissions on file that demonstrate the absence of a genuine issue
of material fact and show that it is entitled to a judgment as a matter
of law. Fed. R. Civ. P. 56(c); Celotex Corp. v. Catrett, 477 U.S.
317, 323 (1986). The movant need not negate the opposing party’s
claims nor produce evidence showing an absence of a genuine fac-
tual issue, but may rely on the absence of evidence to support es-
sential elements of opposing party’s claims. International Assoc. of
Machinists & Aerospace Workers, Lodge No. 2504 v. Interconti-
nental Mfq. Co., 812 F.2d 219, 222 (Sth Cir. 1987). The burden
then shifts to the non-movant to set forth specific facts and compe-
tent summary judgment evidence to raise a genuine issue of material
fact on each essential element of any claim on which it bears the
burden of proof at trial. Fed. R. Civ. P 56(c). The substantive law
governing the suit identifies the essential elements of the claims at
issue and therefore indicates which facts are material. Anderson v.
Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). The non-moving
party may not rest on mere allegations or denials in its pleadings, but
must produce affirmative evidence and specific facts. Anderson,
477 U.S. at 256-57. It meets this burden only if it shows that “a
reasonable

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jury could return a verdict for the non-moving party.” Id. at 254. A
mere scintilla of evidence will not preclude granting of a motion for —
summary judgment Id. at 252.

All reasonable inferences must be drawn in favor of the non-
moving party. Matsushita Electric Industrial Co., Ltd. v Zenith Ra-
dio Corp., 475 U.S. 574. 587-88 (1986), citing United States v.
Diebold, 369 U.S. 654, 655 (1962). Once the burden of proof has
shifted to the non-movant, he “must do more that simply show that
there is some metaphysical doubt as to the material facts.” Id. at
586. Instead he must produce evidence upon which a jury could
reasonably base a verdict in his favor. Anderson, 477 U.S. at 249.
“[T]here is no issue for trial unless there is sufficient evidence favor-
ing the nonmoving party for a jury to return a verdict for that party.
If the evidence is merely colorable, or is not significantly probative,
summary judgment may be granted.” Id., 477 U.S. at 249-50.
Moreover the non-movant must “go beyond the pleadings and by
his own affidavits or by depositions, answers to interrogatories and
admissions on file, designate specific facts that show there is a genuine
issue for trial.” Webb v. Cardiothoracic Surgery Assoc. of North
Texas, P.A., 139 F.3d 532, 536 (Sth Cir. 1998). Unsubstantiated
and subjective beliefs and opinions are not competent summary judg-
ment evidence. Forsyth v. Barr, 19 F.3d 1527, 1533 (5th Cir.),
cert. denied, 513 U.S. 871 (1994); Topalian v. Ehrman, 954 F.2d
1125, 1131 (Sth Cir.), cert. denied, 506 U.S. 825 (1992) . The
non-movant

76a

cannot discharge his burden by offering vague allegations and legal
conclusions. Salis v. Carpenter., 908 F.2d 299, 305 (Sth Cir. 1992);
Lujan v. National Wildlife Fed’n, 497 U.S. 871, 889 (1990).

Pleadings are not summary judgment evidence. Wallace v. Texas
Tech University, 80 F.3d 1042, 1046 (Sth Cir. 1996), citing Little v.
Liquid Air Corp., 37 F.3d 1069, 1075 (Sth Cir. 1994) (en banc.).

In his fourth amended complaint (#189), the controlling plead-
ing at this point, Plaintiff has sued osprey, along with employee,
Tom Garrett), as functioning I as the alleged manager charged with
acting through their common “general agent” and and/or operator
of the vessel, S/T Marine Atlantic, for general negligence under
maritime and common law.’ The fourth amended

? Plaintiff’s fourth amended complaint eliminated an earlier claim against Osprey
under the Jones Act. A seaman can only recover against his employer for causes of
action based on the Jones Act. Cosmopolitan Shipping v. McAllister, 337 U.S. 783,
791 (1949); Ex. E, Affidavit of William B. Gibbs. Saudi conceded that he was not an
employee of Osprey at the relevant time and thus the Jones Act claim was barred as
a matter of law. Relating to the claim for negligence under maritime law, only the M/
T Marine Atlantic’s owner, manager or operator can be liable for unseaworthiness of
the vessel. Daniels v. Florida Power & Light Co., 317 F.2d 41, 43 (Sth Cir. 1963) (to
be liable for breach of warranty of seaworthiness, a defendant “must be in the
relationship of an owner or operator of a vessel”), cert. denied, 375 U.S. 832 (1963);
Baker v. Raymond. Int’!, Inc., 656 F.2d 173, 181-82 (Sth Cir. 1981). The complaint
alleges that Osprey and Acomarit Services Maritimes, S.A. “are believed to have
managed and/or operated” the S/T Marine Atlantic “through their common agent and
employee, Tom Garrett.” The complaint’s third, fourth and fifth causes of action, for
breach of warranty of merchantability, strict liability in tort, and an action in rem
against the ship, respectively, are not complaint asserts that Tom Garrett entered
into an agreement with Acomarit Services Maritimes, S.A. under which Acomarit
Services Maritimes, S.A. would “reimburse” Osprey-Acomarit Ship Management,
Inc. for its payment of Garrett's salary.

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complaint asserts that Tom Garrtt entered into an agreement with
Acomarit Services Maritimes, S.A. under which Acomanrit Services
Maritimes, S.A would “reimburse” Osprey-Acomarit Ship Man-
agement, Inc. for its payment of Garrett’s salary.

Osprey moves for summary judgment on the general negligence
claims, which charge Osprey with breach of the duty to use reason-
able care and observe the standard of competence in the marine
industry in inadequately maintaining the ship and failure to make the
M/T Marine Atlantic a safe and seaworthy vessel. To prove negli-
gence under general maritime law, a plaintiff must demonstrate (1) a
duty owed to the plaintiff by the defendant; (2) breach of that duty;
(3) injury sustained by the plaintiff; and (4) a causal connection be-
tween the defendant’s conduct and the plaintiff’s injury. In re Coo-
per/T. Smith v. Gnots-Reserve, Inc., 929 F.2d 1073, 1077 (Sth
Cir. 1991). Under negligence law, a tortfeasor is

asserted against Osprey.

The fourth amended complaint also alleges, as a sixth cause of action, “a special
plea of res ipsa loquitur” against all Defendants. The doctrine, which is applied in
admiralty as well as tort, is not a rule of law, but purely a rule of circumstantial
evidence that aids an injured plaintiff in making a prima facie case permitting an
inference of negligence by the defendant to be drawn under specified circumstances,
i.e., the accident must be of a kind that ordinarily does not occur in the-absence of
someone’s negligence, it must be caused by an agency or instrumentality within the
exclusive control of the defendant, and it must not have been due to any voluntary
action or contribution on the part of the plaintiff. See, e.q., Curry v. Chevron USA,
779 F.2d 272, 275 (Sth Cir. 1985); Geotechnical Corp. of Del. v. Pure Oil Co., 196
F.2d 199, 205 (Sth Cir. 1952), cert. denied, 344 U.S. 874 (1952) ; Prosser on Torts
42 (1955). Thus it need not be pled as a separate cause of action in the complaint.
Dugas v. Kansas City Southern Ry. Lines, 473 F.2d 821, 825 (Sth Cir. 1973), cert.
denied, 414 U.S. 823 (1973).

78a

liable for breach of a duty only to those to whom it owes such a
duty. Consolidated Aluminum Corp. v. C.F. Bean Corp., 833 F.2d
65, 67 (Sth Cir. 1987). Osprey maintains that it was neither Plaintiff's
employer nor the M/V Marine Atlantic’s owner, taanager or opera-
tor, as evidenced by the affidavit (Ex. A) (“Captain Sheriff Saudi
was not an employee of Osprey Ship management, Inc. at the time
of the occurrence made the basis of the referenced case [May 17,
1999], nor at any other time.”’) and deposition (Ex. S, p. 81, 1.22
through p. 84, 1. 20) of Captain William B. Gibbs, President of
Osprey. Because Osprey was not Plaintiff's employer nor the owner,
manager or operator of the M/V Marine Atlantic, it owed no duty
to Plaintiff. Exs. A, Affidavit of William B. Gibbs, and B, Gibbs’
Dep. at p. 81, 1. 22—p. 84, 1.20. Saudi responds that there is a
fact issue as to whether Osprey, through its former employee, Tim
Garrett, managed or operated the fleet of Acomarit Maritime Ser-
vices,3 including the S/T Marine Atlantic, and therefore had the
responsibility to insure that the vessel was seaworthy and the portside
crane was properly maintained and not defective. Saudi suggests
that a clandestine relationship existed between Osprey and Acomanit.
Saudi claims

> Saudi represents that Acomarit, which was dismissed for lack of personal
jurisdiction, has admitted that it was the manager of the S/T Marine Atlantic. He
alleges that Acomarit and Osprey both employed Garrett as their general agent to
attend to Acomarit’s ships in ports in North and South America, including in the
United States. Saudi further alleges that Osprey entered into an agreement with
Acomarit by which Acomarit would “reimburse” Osprey for paying Garrett's sal-

ary.

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that American Automar owned Osprey Ship Management as a joint
venture with Acomarit Holdings, Ltd. and owned a majority of
Osprey’s stock. He alleges that Osprey agreed to take on Garrett
as Acomarit’s clandestine employee when the joint venture was
formed on June |, 1994. Ultimately, American Automar repurchased
all of Acomanit Holdings’ shares in Osprey and became the 100%
owner of Osprey. After detailing what Saudi characterizes as a se-
ries of “fraudulent nondisclosures and discovery abuse” by Osprey
and Acomarit, Plaintiff states that pursuant to a subpoena duces
tecum served on Osprey, a letter dated December 15, 1998 was
produced by Gibbs, written by Giorgio P. Sulser, Acomarit’s Group
Chief Executive, employed by Acomarit Services Maritimes, S.A.
The letter indicates that Garrett would provide “service to the
Acomarit group on a cost reimbursable basis plus an administrative
fee of $400 per month.” Affidavit of Joe Alfred Izen, Jr., Ex. B;
Dep. of Captain William Gibbs at p. 29, 11. 1-13, Ex. C. Saudi
also cites to the deposition of Captain Gibbs to show that Osprey
kept Garrett on the payroll and on its staffuntil March 1, 1999, less
than two months before Saudi’s injury, because Acomarit wanted
Osprey to do so, and that Acomarit basically had control over its
“clandestine employee.” Saudi maintains that Garrett attended‘

* “Attending” involves physical presence of the attending captain or port
captain on the vessel and includes such duties as assisting during major oil inspec-
tions, port stay control inspections, ISM internal audits, etc. Garrett Dep. at 65-66.
When he was attending, however, no one on the vessel would report to him because
he “had no authority or responsibility aboard the vessel.” Id. at 67.

80a

Acomarit’s ships while they were in United States ports according
to Acomarit’s instructions while Osprey “pretended” that Garrett
was Ospréy’s employee. Saudi asserts that under the law of implied
and apparent agency, if Garrett had the power or authority to con-
trol the management of the S/T Marine Atlantic for his principal and
secret employer, Acomarit, then co-employer Osprey is liable for
Garrett’s negligent acts or failure to act. Restatement (Second) of
Agency 7, B, BA,and 257; Inre Atlantic Financial Manage-
ment, Inc., 784 F.2d 29, 31-32 (1st Cir. 1986) (discussing liability
under agency theories of express or implied authority, apparent au-
thority, and respondeat superior), cert. denied sub nom. AZL Re-
sources, Inc. v. Margaret Hall Foundation, Inc., 481 U.S. 1072
(1987).° Saudi also alleges liability against Osprey under the doc-
trine of respondeat superior. Saudi claimed that he needed more
discovery to determine whether Osprey is liable for Saudi’s injuries
based on failure to warn, negligent maintenance of the crane, and/or
unseaworthiness.

In reply, Osprey emphasizes that uncontroverted evidence ex-
ists in the record that Osprey did not own, operate or manage the
vessel Marine Atlantic, which precludes the unseaworthiness claim,
and that Osprey did not owe any tort duty to Plaintiff, thereby elimi-
nating the negligence claim. Consolidated Aluminum Corp. v. C.F.
Bean Corp., 833 F.2d 65, 67 (Sth Cir. 1987)(‘‘a tortfeasor is

5 Osprey objects that this case deals with a Securities Act misrepresentation
and is not relevant here.

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accountable only to those to whom a duty is owed”), cert. denied,
486 U.S. 1055 (1988). No evidence exists to demonstrate that
Garrett served as the vessel’s operator or manager on behalf of
Osprey, insists Osprey. As Osprey argued in its motion, Gibbs clearly
testified during his deposition that Garrett had no duties with re-
spect to running Osprey’s business, did nothing for Osprey, did not
attend meetings of Osprey’s corporate directors, and did not vote
on any Osprey business. Gibbs further testified that Osprey Ship
Management Inc., before and after its name change,’ had no rela-
tionship with or operational or management responsibilities for the
vessel Marine Atlantic nor any ownership interest in the vessel. Nor
has Saudi presented any evidence of misrepresentation or negligent
conduct by Garrett or tortious conduct by Osprey to support his
agency theory. Because Saudi has offered no competent summary
judgment that Osprey or anyone acting on its behalf committed any
tort in this case, he has not raised any genuine issue of material fact
for trial. Those exhibits Saudi did submit do not controvert Osprey’s
evidence that it did not own, operate or manage the Marine Atlan-
tic.
Judge Stacy subsequently extended the discovery deadline to

December 21, 2000 to give Plaintiff an opportunity to try to obtain
employment records of and to depose Garrett. This Court

* Osprey Ship Management, Inc. was formed in January 1993. Through a
shareholder transaction in June 1994, it changed its name to Osprey-Acomarit. On
December 31, 1998 in another shareholder transaction it again became known by its

former name. Dep. of Captain William Gibson, President of Osprey, Ex. B at 81
(#151).

82a

thereafter ordered Plaintiff to respond to Osprey’s motion for sum-
mary judgment no later than December 27, 2000.

After taking Gairett’s deposition, Plaintiff filed a supplement to
his response (#243). Saudi points to parts of Garrett’s deposition
testimony that Saudi argues demonstrate that Garrett was an em-
ployee of osprey, paid by osprey, when he attended Acomarit-man-
aged vessels, including the Marine Atlantic, in ports in the United
States and elsewhere. Saudi argues that as Port Captain, Garrett
was responsible for insuring cargo safety and safe operation associ-
ated with cargo handling aboard the vessels he attended, which
included the Marine Atlantic. The evidence shows that Garrett vis-
ited the vessel Marine Atlantic three or four times and that he per-
formed a safety inspection and test of both cranes on the Marine
Atlantic in 1997. Saudi argues that based on the facts admitted by
Garrett, Osprey is liable for Garrett’s action under the Restatement
(Second) of Agency 7 8, 8a, and 257 and under the Restatement
(Second) of Torts 32 4(a), which provides that one undertaking an
act or duty, here inspection, must do so competently.

In a sur-reply (#248), osprey complains that the eighty-two,
separately numbered paragraphs in Saudi’s supplement do not re-
late to Osprey, circumvent the Court’s order of September 5, 2000,
at pp. 37-38 (#159), barring argument about Acomarit Services
Maritimes, S.A., impermissibly attempt again to introduce evidence
to support Saudi’s rejected claim that U.S. Trust Corporation owns

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the vessel, assert claims that are exclusively against Marine Trans-
port Lines, and, most significantly, fail to identify or implicitly raise a
genuine issue of material fact regarding Osprey’s alleged manage-
ment of the vessel. Saudi fails to adduce a single fact that shows that
Osprey owed a duty to Saudi or that Garrett’s activities in January
1997 legally or proximately caused the crane’s failure in May 1999.’
With regard to specific statements in the supplement, Os prey
inter alia points out that Saudi’s injury did not occur was the area of
Garrett’s supervisory job performance; instead it occurred after cargo
operations had been suspended. Ex. 1, excerpt from deposition
transcript of Saudi, p. 113, 1. 17 through p. 114, 1. 18. Garrett’s
admission that as port captain he oversaw cargo handling, loading,
discharging and safe operation regarding cargo

” Osprey quotes the Fifth Circuit in Donaghey v. Ocean Drilling & Exploration
Co., 974 F.2d 646, 649 (Sth Cir. 1992) :

Under the general maritime law, a party’s negligence is
actionable only if it is a “legal cause” of the plaintiff's injuries.
See Chavez v. Noble Drilling Corp., 567 F.2d 287, 289 (Sth Cir.
1978) _ “[L]egal cause is something more than ‘but for’ causa-
tion, and the negligence must be a ‘substantial factor’ in the
injury.” Thomas v. Express Boat Co., 759 F.2d 444, 448 (Sth
Cir. 1985) (citations omitted). The term “substantial factor”
means more than “but for the negligence, the harm would not
have resulted.” Spinks v. Chevron Oil Co., 507 F.2d 216, 223
(Sth Cir. 1975); see also Chisholm v. Sabine Towing & Transp.
Co., 679 F.2d 60, 63 (Sth Cir. 1982).

84a

handling does not establish that Osprey, through Garrett, had an
obligation to detect every deficiency in equipment aboard the ves-
sel, or that Osprey owed a duty to Saudi in May 1999 for a vetting
inspection like that Garrett participated in January 1997 on behalf
of oil majors, which were not time charterers of the vessel at the
time of the incident. Garrett never warranted his work io the oil
major on whose behalf the 1997 vetting inspection was done, never
warranted or certified the crane as meeting any particular standard,
and it was not his duty to do so since the oil major had its own
vetting inspector present. In the intervening two and one half years
between that inspection and the incident giving rise to this suit, many
things could have intervened and changed the crane’s condition.
Saudi has failed to provide proof of proximate cause to demon-
strate that Garrett’s actions in 1997, even if performed on behalf of
Osprey, were causally connected to the crane’s failure on May 17,
1999. Saudi has insinuated that Garrett was concealing Osprey’s
alleged link with Acomanit and the SIT Marine Atlantic in asserting,
“Despite the fact that he attended Acomarit managed vessels as
Port Captain on Csprey-Acomanrit time, while he was being paid as
Osprey’s employee, Garrett claamed Osprey-Acomarit had no con-
nection with the Marine Atlantic.” Osprey points out that Garrett’s
deposition testimony made clear that he worked “as an outside con-
sultant that attended vessels for a variety of reasons, and consulted
with the vessel’s staff to instruct them in oil major vetting proce-
dures, ISM systems

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etc., but that Osprey-Acomarit and Acomarit Services Maritimes
did not control or supervise that consulting work. Ex. 2, Garrett
Dep., pp. 312-13.

Sauc'l seems to be charging that, given Osprey’s history as a
joint ¥ enturer with Acomarit Services Maritimes,’ Acomarit Ser-
vices employed Garrett but arranged clandestinely for Osprey to
pay his wages a: its employee. Moreover, he argues that Osprey
through co-employee Garrett s actions as a port captain attending
vessels, including vessels owned by Acomarit entities around the
world, in essence also managed and operated those including the
M/V Marine Atlantic, and is thus liable to Saudi for negligence.

The Court has reviewed the record particularly Saudi’s supple-
ment and Garrett’s deposition testimony, in detail, to determine what
the evidence demonstrates regarding Garrett’s factual and legal re-
lationship to Acomarit Services Maritimes, Osprey, and Plaintiff. It
finds that the deposition testimony indicates the following.

Garrett worked for Osprey-Acomanit for almost five years from
May 1, 1994 until February 28, 1999. Garrett Dep. at pp. 119, 43.
During that time he acted mainly as an outside consultant for other
client companies. Id. at 33.-34. In that capacity he trained seamen
on other vessels, including some of the Acomarit

* Acomarit owned no vessels but was strictly a managing company managing
vessels owned by other Acomarit-reiated companies and attended by Garrett on
Acomarit’s behalf. Garrett Dep. at 88.

86a

group,’ and performed general surveys, International Safety Man-
agement (“ISM”)'° audits, and attending during oil major vetting
inspections.'' Id. at 35-36. The audits were at the request of and
for the benefits of these outside companies, and not for the bene ft
of Osprey-Acomarit. Garrett Dep. at pp. 40-41.

In his job for Osprey-Acomarit he was classified as “Group
Port Captain,” the group being made up of Osprey-Acomarit and
other companies. Id. at 43, 108. As Group Port Captain his “re-
sponsibility was to oversee the cargo handling, loading, discharging
and safe operation associated with cargo handling.”

Id. at 25. He did not “physically handle the cargo” or load or
discharge cargo. Id. at 27.

Garrett was emphatic that “Osprey-Acomarit had nothing to
do with the management of the vessels that I attended [as Port Cap-
tain]. Osprey had nothing to do with the day-to-day operations or
the ISM system established aboard any of those vessels.” Id. at 87,
63. In particular, regarding the M/V Atlantic Marine, which he vis-
ited as Group Port Captain, Garrett stated that he knew its

* The Acomarit group included Acomarit Services Maritimes, Acomarit U.K.,
Acomarit Singapore, Acomarit Hellenic, and Acomarit Cypress.

'© 7SM is an international standard. As ISM audit reviews management proce-
dures aboard a vessel to determine whether those procedures comply with theve
standards. Id. at 39, 87.

'' Oil vetting inspections are made by oil companies of other entity's vessels.
Id. at 41. Garrett testified that he, himself, did not do the actual oil vetting inspec-
tions while he was employed by Osprey-Acomarit.

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F tion of the vessel. I attended for a very small period of time, at very
i irregular intervals, and was not involved in the direct superinten-
dency of the vessel.” Id. at 150.'* See also Id. at p. 219 (“Number
one, I never managed vessels for anyone while on Osprey-
Acomarit’s payroll. I never received a job description or a contract
from any of the people that I did consulting work with or for.”); Id.
at 224 (‘Bear in mind, my responsibilities in Acomanit evolved into
an outside consultancy-ship with various parties. So when I attended
vessels, I never had any responsibilities and authority aboard such
vessels.”’).
He was also clear that Acomarit Maritimes Services “owned no
vessels. It was strictly a management company” and managed the

'? Garrett testified that he visited the M/V Marine Atlantic three or four times.
Id. at 128-29. He testified, “Osprey-Acomarit had no role in the management or the
operation of the... Marine Atlantic.” Id. at }31. He recalled performing an ISM audit
for Acomarit Maritimes while he was an Osprey-Acomarit employee. Id, at 85. He
also described that once in the first quarter of 1997, because Exxon or Vela was
considering chartering the tanker, when he and a vetting inspector interested in cranes
performed operational control tests of vessel’s cranes, which were manufactured by
Appleton, and examined the cranes’ records and the operational manual, during the
vetting inspection. Id- at 127-29, 140-43. They operated the cranes in every mode
possible and found no “indication that there was anything wrong with the internal
mechanisms of that crane.” Id. at 141. He stated, “There was nothing with the cranes
aboard the Marine Atlantic that would have led me to believe that there was an
inherent flaw in that crane or those cranes.” Id.. at 127. Garrett represented that he
was working for Osprey-Acomarit during the 1997 oil vetting inspection of the M/
V Marine Atlantic, but that he was attending on behalf of Acomarit Services Maritimes.
Id. at 64-65.

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vessels that he attended on its behalf. Id. at 88. Moreover, he in-
sisted that although he was physically present on the vessels he at-
tended and assisted in various inspections, as noted he “had no
authority or responsibility aboard the vessel” or off the vessel and
no one on the vessel reported to him. Id. at 66-67. If he saw some-
thing on the vessel that needed to be corrected, he would report it
to the Vessel Master. Id. at 69-70." He testified, “You have to bear
in mind that through my tenure with Acomarit, I had no authority to
interrogate anyone, to make sure that the repairs were completed.
Basically, I took people at their word, or usually learned that things
were going slower than normal or they required more assistance.”
Id. at 119. See also Id. at 158 (With respect to the vessels that he
attended as Port Captain under his arrangement with Osprey
Acomanrit, as an employee, “I had no authority, whatsoever, to enter
into any contractual obligation on behalf of Osprey-Acomarit or
any of the companies.”’)

Garrett also clarified the fact that while he received payments
from Osprey-Acomarit, such rembursement came from the vessel
operator for which he acted as a consultant. Id. at 109. He ex-

plained,

During my employment with, J°m going to use the
term “Acomarit,” I worked fer a variety of

'? Asked what Garrett would do if the Vessel Master reported a problem to
Garrett, Garrett stated clearly that his role would be merely as a consultant, but that
the Vessel Master would have to “order[] any necessary parts, material or labor to fix
a problem” and report to his superior, the Marine Superintendent. Id. at 7071.

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people; and being that Acomarit had several Euro-
pean offices, clients such as Torm paid my services
through Acomant U.K. Limited to Acomarit Geneva
to Osprey Ship Management. So acting as a con-

' sultant, my time was apportioned to people outside
of Acomarit.

Id. at 157. When there were expenses, such as flying to the
area, hotel, car rental, purchase of publications and charts for the
benefit of the vessels he was attending, he was reimbursed after he
would inform the operator of the vessel, which would in turn notify
the local Acomarit office. The operator would reimburse Acomarit,
which in turn reimbursed him through Osprey Acomarit, which is-
sued him checks: “Osprey-Acomarit received notification to extend
me funds once expenses had been approved.” Id. at 159-62. He
analogized payments for his services:

Osprey, the Acomanrit group that I worked with,
consulting-wise, controlled some of my payments.
That’s the easiest way to explain it, because, let’s
say you have a company, okay, you need someone
to perform a specific operation, you understand that
Captain Saudi over there has an operating com-
pany and he has people he could, as you say, loan
to you, I would be loaning to you. Now Captain
Saudi, with his company, he is located in a different
area than I am, and there are very long, specific
requirements to fulfill the obligations under IRS and
several other things, you pay Captain Saudi, Cap-
tain Saudi pays the office that I work for, and I
eventually get my money.”

Id. at 162. He would be reimbursed electronically in his bank

account. Id. at 163. “Osprey-Acomarit would not have given me
funds had they not received them first.” Id. at 164.

90a

Despite these clear professions, Saudi attempts without suc-
cess to use Garrett’s deposition to argue that osprey is liable as a
manager/operator through Garrett’s activities.

In sum, the Court finds that the deposition testimony of Tom
Garrett does not support Saudi’s claims that Garrett’s activities as a
‘‘co-employee” of Acomarit Services Maritimes and Osprey should
impose unseaworthiness liability on Osprey as an operator or man-
ager of the M/V Atlantic. Nor has there been any evidence submit-
ted of misrepresentations or tortious conduct by Garrett in 1997 or
other times or that his attending inspections in 1997 proximately
caused Saudi’s injuries in 1999,

Thus this Court agrees with Osprey that Saudi has not pre-
sented competent summary judgment evidence raising a genuine
issue of material fact to support Saudi’s claims of negligence against
osprey and allegations that managed the SIT Marine Atlantic through
the activities of Garrett. Mere speculation will not defeat a motion
for summary judgment. This case is set for docket call on April 6,
2001. By now Saudi has had substantial time to obtain factual evi-
dence to support his conclusory allegations, but he has failed to
submit any to the Court. Therefore the Court

ORDERS that Osprey’s motion for summary judgment on the
negligence claims under common and maritime law against it is

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GRANTED.
SIGNED at Houston, Texas, this 19" day of February, 2001

MELINDA HARMON
UNITED STATES DISTRICT JUDGE

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92a

Appendix H
IN THE UNITED STATES DISTRICT COURT FOR THE
SOUTHERN DISTRICT OF TEXAS HOUSTON DIVISION

CIVIL ACTION NO. H-99-2367

CAPTAIN SHERIFF SAUDI, °
Plaintiff,
V.
S/T MARINE ATLANTIC, ET AL.,
Defendants.

MEMORANDUM AND RECOMMENDATION

Before the Magistrate Judge upon referral from the District Judge
is Defendants’ Joint Motion to Strike Plaintiff’s Experts Salah
Mahmoud and Sheriff Saudi (Document No. 220). Plaintiff has filed
a response to the motion (Document No. 252), to which Defen-
dants have filed a Reply (Document No. 253). Having considered
the parties’ submissions, the opinions and deposition testimony of
Salah Mahrnoud and Sheriff Saudi, and the reliability requirements
set forth in Daubert v. Merrell Dow Pharmaceuticals, Inc., 509 U.S.
579 (1993) and FED. R. EVID. 702, the Magistrate Judge REC-
OMMENDS, for the reasons set forth below, that Defendants’ Joint
Motion to Strike Plainti*f’s Experts Salah Mahmoud and Sheriff
Saudi (Document No. 220) be GRANTED.

Reliability Requirements
FED. R. Evan. 702 provides:

If scientific, technical, or other specialized
knowledge will assist the trier of fact to understand
the evidence or determine a fact in issue, a witnes ‘
qualified as an expert by knowledge, skill, experi-
ence, training, or education, may testify thereto in
the form of an opinion or otherwise, if (1) the testi-
mony is based upon sufficient facts or data; (2) the

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93a

testimony is the product of reliable principles and
methods; and (3) the witness has applied the prin-
ciples and methods reliably to the fact of the case.

In Daubert v. Merrell Dow Pharmaceuticals, Inc., 509 U.S.
579 (1993), the United States Supreme Court held that “‘scientific”
expert testimony must both reliable and relevant to be admissible.
In Kianho Tire Co., Ltd. v. Carmichael, 526 U.S. 137 (1999),
the Supreme Court extended the reliability and relevancy require-
ments to all expert witness testimony, regardless of whether the ex-
pert possesses “scientific, technical, or other specialized knowledge”.
Although relevancy issues are generally straightforward, reliability
issues are not. At its most basic, Daubert 5 reliability requirement
forecloses the admission of expert witness testimony when it is not
“supported by appropriate validation.” Daubert, 509 U.S. at 590.
In other words, the expert’s opinion must be grounded in more than
“unsupported speculation or subjective belief.” Curtis v. M&S Pe-
troleum, Inc., 174 F.3d 661, 668 (Sth Cir. 1999).

When scientific expert witness testimony is challenge for reli-
ability, four nonexclusive factors are generally considered: 1) whether
the theory or technique upon which the expert witness’ opinion is
based has been tested; 2) whether the theory or technique has been
subjected to peer review and publication; 3) whether the theory or
technique has a known or potential rate of error; and 4) whether the
theory or technique has achieved “general acceptance” in the rel-
evant scientific community. Daubert, 509 at 593-595. When tech-
nical or other specialized knowledge forms the basis of an expert
witness’ opinion, the foregoing factors may or may not have any
applicability, and the district court will have to determine, on a case
by case basis, how to test the reliability of the expert’s opinions.
Kumho, 526 US. at 150-151.

Salah Mahmoud

Defendants seek to strike Salah Mahmoud as an expert in this
case on the basis that: 1) there is no data or reliable methodology to
support his opinion that an ABS survey of the crane

94a

in December 1998 could not have occurred or could not have oc-
curred as documented; 2) his opinion as to corrosion rate is unreli-
able because it is based on the assumption, which has no factual
support, that the crane at issue in this case was submerged in sea-
water; and 3) he. is not qualified as an expert in crane maintenance
and inspection, having no training or experience with applicable regu-
lations or industry standards for the maintenance and inspection of
cranes. Additionally, Defendants object to Mahmoud’s calculation
of the amount of corrosion on two spline gears (.21 to .25 inches),
because that calculation was not made by reference to the original
diameters of the gears, and because Mahmoud did not calibrate the
equipment he used to measure the spline gears.

Mahmoud’s opinion that an ABS survey of the crane could not
have been performed in December 1998 (or could not have been
performed as documented), and his opinion as to the corrosion rate
are opinions that are based insufficient facts and data. In addition,
given the insufficient facts and data to support the opinions, the opin-
ions are unreliable.

Mahmoud speculates that the ABS crane survey could not have
occurred in December 1998. According to Mahmoud, it is unthink-
able that the crane would have failed with a load of 200 pounds in
May 1999 if a load test of 50,000 pounds had actually been per-
formed on the crane in December 1998. Plaintiff, in response to
Defendants’ Joint Motion to Strike, posits that Mahmoud’s opinion
is supported by “common sense.” To the extent Mahmoud’s opin-
ion as to whether the ABS crane survey was actually conducted in
December 1998 is nothing more than “common sense’, expert tes-
timony is not needed. However, in addressing Defendants’ com-
plaints about the reliability of such a “common sense” opinion, it is
evident that Mahmoud’s opinion is pure speculation. Mahmoud was
not present at the time the ABS survey was to have

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occurred, and he has articulated no facts to support his specula-
tion that the survey could not have occurred. Moreover, Mahmoud
has not explained or supported his speculative opinion as to whether
the survey occurred with evidence that nothing else during the six
month period between the survey and the crane failure could have
led to or contributed to the failure. Because Mahmoud’s opinion
that the ABS survey of the crane in December 1998 either did not
occur or did not occur as documented is not supported by any facts
or data and is speculative, that opinion is not admissible under FED.
R. EVID. 702.

With respect to Mahmoud’s opinion as to the corrosion rate, as
has been shown by Defendants, and as 1s reflected in Mahmoud’s
deposition, Mahmoud’s opinion about the rate of corrosion is based
on his unsupported belief that the crane was submerged in saltwa-
ter. Neither Plaintiff nor Mahmoud has offered any evidence that
tie crane was in fact submerged in saltwater and was therefore
subject to a corrosion rate based on saltwater submersion. As such,
this opinion of Mahmoud is also based on insufficient facts and data,
and is therefore inadmissible under FED. R. EVID. 702.

With respect to Mahmoud’s opinions as to crane maintenance
and inspection requirements, Mahmoud’s deposition evidences that
he is not qualified to offer opinions on crane maintenance and in-
spection requirements. Mahmoud has no training or experience in
the inspection of cranes, and is generally unaware of the rules, regu-
lations and industry standards governing the maintenance and in-
spection of cranes. Accordingly, any opinion by Mahmoud as to
crane maintenance and inspection requirements is inadmissible un-
der FED. R. EVID. 702.

Finally, with respect to Mahmoud’s opinion of the amount of
corrosion of two spline gears, which he determined from the differ-
ence in the length of existing “teeth” on the gear and

96a

worn “teeth”, the undersigned concludes that while Mahmoud did
not calibrate the equipment he used, and did not know the original
diameter of the teeth, his calculations are simplistic and reliably evi-
dence the difference between the iength of the worn teeth and the
existing (or intact) teeth on the gears. As such, subject to a motion in
limine in which this issue may be revisited ait trial, Mahmoud’s opin-
ion as to the amount of corrosion on two spline gears should not, at
this stage, be disallowed.

Sheriff Saudi

Defendants seek to exclude the opinions of Plaintiff Sheriff Saudi
as to (1) the inspection of cranes; (2) the load testing of cranes; (3)
applicable standards, rules and regulations regarding crane inspec-
tions; (4) applicable standards, rules and regulations regarding load
testing; (5) applicable standards, rules and regulations regarding qua-
drennial inspection of cranes; (6) classification society standards for
the inspection of cranes, including those of the ABS, Det Norske
Veritas (“DNV”), and Lloyd’s of London, and (7) duties, responsi-
bilities and the standard of care applicable to the refurbishing of the
MARINE ATLANTIC. According to Defendants, Sheriff Saudi has
no training or experience relative to the inspection of cranes, and no
training, experience or practice knowledge of the rules, regulations
and industry standards for the inspection of cranes or the refurbish-
ing of vessels.

The undersigned has reviewed the deposition of Plaintiff Sheriff
Saudi provided by Defendants as an exhibit to their Joint Motion to
Strike. Saudi’s deposition testimony reveals conclusively that he has
no training e:,perience or personal knowledge which would qualify
him as an expert in crane inspection, load inspections, applicable
rules, regulations and industry standards for the inspection of cranes
and the refurbishment of vessels. The fact that Saudi is

97a

a captain with many years of experience as a master of vessels, a
mooring master pilot, and an instruction pilot does not suffice as
experience or training which would qualify Saudi to testify as an
expert in crane inspection and maintenance. Accordingly, the Mag-
istrate Judge recommends that Plaintiff Sheriff Saudi be disallowed
from testifying as an expert on the following topics: (1) the inspec-
tion of cranes; (2) the load testing of cranes; (3) applicable stan-
dards, rules and regulations regarding crane inspections; (4) appli-
cable standards, rules and regulations regarding load testing; (5)
applicable standards, rules and regulations regarding quadrennial
inspection of cranes; (6) classification society standards for the in-
spection of cranes, including those of the ABS, Det Norske Veritas
(“DNV”), and Lloyd’s of London, and (7) duties, responsibilitie.
and the standard of care applicable to the refurbishing of the MA-
RINE ATLANTIC.
Conclusion

Based on the foregoing and the conclusion from the parties’
submissions that certain opinions of Salah Mahmoud and Plaintiff
Sheriff Saudi are inadmissible under Fed. R. EVID. 702, the Mag-
istrate Judge

RECOMMENDS that Defendants’ Joint Motion to Strike
Plaintiff's Experts Salah Mahmoud and Sheriff Saudi (Document
No. 220) be GRANTED IN PART; that Salah Mahmoud be disal-
lowed from testifying about (1) whether the ABS crane survey in
December 1998 was performed or performed as documented; (2)
the corrosion rate; and (3) crane maintenance and inspection re-
quirements; and that Plaintiff Sheriff Saudi be disallowed from of-
fering any expert opinion testimony cn (1) the inspection of cranes;
(2) the load testing of cranes; (3) applicable standards, rules and
regulations regarding crane inspections; (4) applicable

98a

standards, rules and regulations regarding load testing; (5) appli-

cable standards, rules and regulat:ons regarding quadrennial inspec-
tion of cranes; (6) classification society standards for the inspection
of cranes, including those of the ABS, Det Norske Veritas (““DNV”’),
and Lloyd’s of London, and (7) duties, responsibilities and the stan-
dard of care applicable to the refurbishing of the MARINE AT-
LANTIC.

The Clerk shall file this instrument and provide a copy to all
counsel and unrepresented parties of record. Within 10 days after
being served with a copy, any party may file written objections pur-
suant to 28 U.S.C. § 636(b)(1)(C), FED. R.. Civ..P. 72(b), and
General Order 805, S.D. Texas. Failure to file objections within
such period shall bar an aggrieved party from attacking factual find-
ings on appeal. Thomas v. Avn, 474 U.S. 140 (1985); Ware v.
King, 694 F.2d 89 (Sth Cir. 1982), cent. denied, 461 U.S. 930
(1983); Nettles v. Wainwright, 677 F.2d 404 (Sth Cir. 1982) (en
bane). Moreover, absent plain error, failure to file objections within
the ten day period bars an aggrieved party from attacking conclu-
sions of law on appeal. Thomas v. Arn, 474 U.S. 140 (1985); Ware
v. King, 694 F.2d 89 (Sth Cir. 1982), cert. denied, 461 U.S. 930
(1983): Nettles v. Wainwright, 677 F.2d 404 (Sth Cir. 1982) (en
banc). Moreover, absent plain error, failure to file objections within
the ten day period bars an aggrieved party from attacking conclu-
sions of law on appeal. Douglass v. United Services Automobile
Association, 79 F.3d 1415, 1429 (Sth Cir. 1996). The original of
any written objections shall be filed with the United States District
Clerk, P.O. Box 61010, Houston, Texas 77208.

Signed at Houston, Texas, this 26" day of January, 2001.

FRANCES H. STACY
UNITED STATES MAGISTRATE JUDGE

99a

Appendix I
IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF TEXAS
HOUSTON DIVISION

CIVIL ACTION NO. H-99-2367

CAPTAIN SHERIFF SAUDI,
Plainuff,
V.
S/T MARINE ATLANTIC, ET AL.,
Defendants.

ORDER

if Defendants’ Joint Motion to Strike Plaintiff’s Experts Salah

| Mahmoud and Sheriff Saudi (Document No. 220) has been re-
ferred to the undersigned. A written response to that motion, pursu-
ant to the Local Rules of this District, is due on or before January 4,
2001. Ina letter to the Court dated December 21, 2000, Plaintiff’s
counsel asked that the Joint Motion to Strike be stricken because it
did not contain a certificate of conference. Additionally, in that let-
ter, Plaintiff's counsel asked to be afforded the twenty day response
time provided for by the Local Rules prior to a hearing being held
on the motion. The twenty day response time provided for by the
Local Rules applies to the Joint Motion to Strike, and for purposes
of clarity as well as to obviate the need to address any requested
extensions of that response deadline, undersigned advises Plaintitf
that his response tc the Joint Motion to Strike must be filed on or
before January 8, 2001, or such response will not be considered.

Signed at Houston, Texas, this 3% day of January 2001.

FRANCES H. STACY
UNITED STATES MAGISTRATE JUDGE

100a

Appendix J
IN THE UNITED STATES DISTRICT COURT FOR THE
SOUTHERN DISTRICT OF TEXAS HOUSTON DIVISION

CIVIL ACTION NO. H-99-2367

CAPTAIN SHERIFF SAUDI,
Plainuff
VS.

S/T [MARINE ATLANTIC, Her Equipment and Appurte-
nances, In Rem (a/k/a M/V Marine Atlantic, Her Equipment
and Appurtenances, In Rem, a/k/a M/T Marine Atlantic, Her
Equipment and Appurtenances, In Rem), MARINE ATLAN-
TIC, LTD., JOHN DOE COMPANY, Owner of the Vessel
Marine Atlantic, SACOMARIT SERVICES MARITIMES, S

.A., OSPREY ACOMARIT SHIP ENTERED MANAGE-

MENT, INC., VALMET- APPLETON, INC., APPLETON

MACHINE CO. (Appleton Marine Division), APPLETON
MACHINE CO.,INC., Michael N. Milby, Clerk

APPLETON MARINE, INC., JOHN DOE COMPANY,

Designer of the Crane, KOCH PETROLEUM GROUP, L.P.,
JURONG SHIPYARD, LTD. AND UNITED STATES TRUST
COMPANY OF NEW YORK,

Defendants

MEMCRANDUM AND ORDER

Pending before the Court in the above referenced admiralty
and maritime personal injury action, arisimg from the May 17, 1999
fall. of Plaintiff Captain Sheriff Saudi (“Plaintiff’ or “Saudi’’) from a
lifting basket as he was transferred from the tanker Marine Atlantic
to the M/V American Discovery because of tie collapse of an al-
legedly defective portside crane on the tanker’ farine Atlantic, is
inter alia Defendant Marine Atlantic Ltd.’s opposed motion to dis-
mis3 for lack of personal jurisdiction (#162) .

10la

With a supporting affidavit (#164) from its Director and Vice
President Arthur Jones, Defendant Marine Atlantic Ltd. argues that
this Court lacks personal jurisdiction over it.' First, its

' Federal Rule of Civil Procedure 4(e) permits a district court to assert personal
jurisdiction over a nonresident in a diversity action to the extent allowed under the
law of the state where the district court sits. A Texas court has personal jurisdiction
under the Texas long-arm statute over a foreign defendant that “does business” in
Texas. i.e., that (1) contracts by mail or otherwise with a Texas resident and either
party is to perform the contract in Texas; (2) commits a tort in whole or in part in this
state; or (3) recruits Texas residents, directly or through an intermediary located in
this state, for employment inside or outside of Texas. Tex. C’v. Prac. & Rem. Code
17.042.045 (West 1999). The Texas Supreme Court has interpreted the language of
its long-arm statute to reach as far as the federal constitutional requirements of due
process will allow. Schlobohm v. Schapiro, 784 S.W.2d 355, 357 (Tex. 1990). Thus
the Court examines the due process requirements.

A party’s liberty interest under the fourteenth amendment protects it from
being subjected to binding judgments of a forum with which it has established ne
meaningful contacts, ties or relations.”’ Guidry v. U.S. Tobacco Co., Inc., 188 F.3d
619, 623 (Sth Cir. 1999), quoting Burger King Corp. v. Rudzewicz, 471 U.S. 462,
472 (1985), and International Shoe v. Washington, 326 U.S. 310, 319 (1945). The
due process clause requires that a foreign defendant have “minimum contacts” with
the forum state so that the maintenance of a suit does not offend “traditional notions
of fair play and substantial justice.” Id., citing International Shoe, 326 U.S. at 316.
For minimum contacts, a nonresident defendant must have purposefully availed
himself of the privilege of conducting activities within the forum state, thereby
invoking the benefits and protections of its laws. Gardemal v. Westin Hotel Co., 186
F.3d 588, 595 (Sth Cir. 1999).

Where a nonresident defendant has sufficient “continuous and systematic”
contacts with the state in which the suit is pending, the court may exercise “general”
personal jurisdiction over that party in a cause of action that does not arise out of or
relate to that defendant’s contacts with the forum state. Guidry, 1.88 F.3d at 623,
citing Helicopteros Nacionales de Colombia, S.A. v. Hall, 466 U.S. 408, 414 (1984).
“Continuous and systematic contacts” are requirea by the due process clause be-
cause the forum state does not have a direct interest in the cause of action. Gardemal,
186 F.3d at 595. Thus the minimum contacts review is more demanding and broader
for genera! jurisdiction and requires the plaintiff to demonstrate substantial activities
in the forum state. Id.

Where the controversy “‘is related to or arises out of [the defendant’s] contacts
with the forum,” the district court may exercise “specific” personal jurisdiction.
Guidry, 166 F.3d at

102a

623, citng Shaffer v. Heitner, 433 U.S. 186, 204 (1977). The court must examine the
relationsaip among the defendant, the forum state, and the }*tigation to determine
whether the defendant purposefully established “minim’, "1 contacts” with the fo-
rum state that made it foreseeable that it should “reason sly anticipate being haled
into court there.” Id. at 625, citing Burger King, 471 U.S at 474. To decide if there is
specific jurisdiction, the district court must apply a three-prong test: (1) whether the
defendant has minimum contacts with the forum state, i.e., did it purposely direct its
activities toward the forum state or purposely avail itself of the privilege of conduct-
ing activities there; (2) did the plaintiff's cause of action arise out of or result from the
defendant's forum-related contacts; and (3) would the exercise of personal jurisdic-
tion be fair and reasonable? Id.

If the court finds that the foreign defendant’s related or unrelated contacts with
the forum state are sufficient, it then examines whether the exercise of jurisdiction is
“fair” by examining several factors relating to ‘traditional notions of tair play and
substantial justice”: (1) the ourden on the nonresident defendant; (2) the interests of
the forum state; (3) the plaintiff’s interest in ovtaining relief; (4) the interstate
judicial system’s interest in the most efficient resc!uiion of controversies; and (5) the
shared interests of the several states in furthering fundamental social policies. Felch
v. Transportes Lar-Mex SA de CV, 92 F.3d 320, 324 (Sth Cir. 1996).

The party that invokes a federal court’s jurisdiction bears the burden of estab-
lishing minimum contacts that warrant the exercise of personal jurisdiction over a
foreign defendant. Id., citing Bullion v. Gillespie, 895 F.2d 213, 216 (Sth Cir. 1990) .
If the court rules on a motion to dismiss for lack of jurisdiction without holding an
evidentiary hearing, the nonmoving party need only make a prima facie showing,
through pleadings, depositions, affidavits, exhibits, or any combination of recos-
nized methods of discovery, of minimum contacts of each defendant to support
specific personal jurisdiction and demonstrate that the cause of action arose out of
that defendant’s forumrelated contacts; the court must accept as true the nonmovant’s
allegations and resolve all factual disputes in its favor. Id., citing Latshaw v. Johnston,
167 F.3d 208, 211 (Sth Cir. 1999), and Bullion, 895 F.2d at 217 (“uncontroverted
allegations tn the plaintiff's complaint must be taken as true, and conflicts between
the facts contained in the parties’ affidavits must be resolved in the plaintiff’s
favor”); Colwell Realty Investments v. Triple T Inns of Arizona, 785 F.2d 1330,
1333 (Sth Cir. 1986). Ultimately, the plaintiff must establish personal jurisdiction by
a preponderance of the evidence either at a pretrial evidentiary ‘hearing or at trial.
Felch, 92 F.3d at 326, citing Travelers Indem. Co. v. Calvert Fire Ins. Co., 798 F.2d
826, 831 (Sth Cir. 1986), modified on rehearing in unrelated part, 836 F.2d 850 (Sth
Cir. 1988), and DeMelo v. Toche marine, Inc., 711 F.2d 1260, 1270-71 & n. 12 (Sth
Cir. 1986) (only where the district court decides a motion to dismiss for lack of
personal jurisdiction without a

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103a

vessel, the Marine Ailantic, at approximately 400,000 deadweight
tons and with a deep draft of seventy-five feet when fully loaded, is
unable to enter into any port in the continental United States, includ-
ing any port in Texas. It is physically impossible for the vessel to
navigate within the territorial waters of Texas, which extend ap-
proximately ten miles seaward from the state of Texas. At the time
of Saudi’s injury, the vessel was operated by Acomarit Services
pursuant to a Vessel Management Agreement between Marine At-
lantic Ltd. and Acomarit and was chartered by Koch Shipping, Inc.,
which directly ordered the vessel to ports for loading and discharg-
ing of the cargo, pursuant to a Time Charter Agreement between
Marine Atlantic Ltd. and Koch. As owner, Marine Atlantic Ltd. did
not exercise day-to-day operational control of the vessel or control
her location. The contract between Marine Atlantic Ltd. and Acomarit
was not negotiated in Texas, nor is either a Texas entity. The con-
tract between Manine Atlantic Ltd. and Koch also was not negoti-
ated in Texas and neither is a Texas entity. Acomarit’s contract per-
formance took place in Geneva, Switzerland, while Koch’s con-
tract performance occurred in Kansas.

Marine Atlantic Ltd. argues that this Court lacks specific juris-
diction over it because this action does not arise out of or relate to
any contact between it and Texas or any activities in Texas, but only
to activities on the high seas, in international waters. Marine Atlantic
Ltd. maintains that it has

hearing may the plaintiffs satisfy their burden by presenting a prima facie case). A
dismissal for lack of personal jurisdiction is not a dismissal on the merits and must
therefore be without prejudice. Guidry, 188 F. 3d at 623.

104a

no contacts with Texas. It cites as on-point authority for its dis-
missal, Asarco, Inc. v. Glenara, Ltd., 912 F.2d 784, 786 (Sth Cir.
1999), in which the defendant was dismissed because it had no
contacts with the forum, lacked control over where the vessel would
make port, and never called and was physically unable to call ona
Texas port.

Marine Atlantic Ltd. also insists the Court lacks general juris-
diction over it because it is not authorized to do business in Texas,
never had an agent for service of process in Texas, never had an
employee based in Texas, never owned any real property in Texas,
never maintained an office in Texas, does not maintain any records
in Texas, never solicited business in Texas and never signed a con-
tract in Texas for performance of work in Texas. It has no contacts
with Texas and lacked authority to direct the vessel’s movement.

In response, asserting that the S/T Marine Atlantic’s deep draft
and inability to enter the territorial waters of Texas are not fatal to
the assertion of jurisdiction here, Saudi complains that Marine At-
lantic Ltd. avoids any discussion of its contacts with states other
than Texas and with the United States in generally. He argues that
the commentary to Federal Rule of Civil Procedure 4 (k) (2) indi-
cates that the rule was intended by Congress to extend nationwide
federal personal jurisdiction over defendants with sufficient con-
tacts with the United States as a whole where the exercise of such
personal jurisdiction would not “offend the traditional concepts of
fair play and substantial justice”. CBE-cause Marine Atlantic Ltd.
failed to address its contacts with

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105a

the United States as a whole, Saudi insists that Marine Atlantic Ltd.’s
motion is defective and cannot support the requested dismissal. He
comments that the now complete’ affidavit of Arthur Jones also
“studiously avoids making any denial that [Marine Atlantic] has no
contacts with the United States.”

Moreover, Saudi emphasizes, Marine Atlantic Ltd. has admit-
ted having done business with Koch Shipping, Inc., a United States
company. With other factors, such as hiring United States residents
to conduct business for its benefit, this point may be sufficient to
sustain personal jurisdiction, insists Saudi. Marine Atlantic Ltd. has
conceded that Koch Shipping, Inc.’s portion of the charter contract
was performed in Kansas.

Saudi alleges that Robert Hamshaw and Greg Doyle are agents
of Marine Atlantic Ltd. Saudi submits a letter dated May 3, 2000,
written by Thomas Nork, whom Saudi characterized as apparent
counsel for Marine Atlantic Ltd. at that time,’ stating that Robert
Hamshaw would not appear for his noticed deposition and that
‘“Hamshaw’s relationship with Marine Atlantic Ltd., if any,” was
unclear. Ex. A to #173. Nevertheless, Saudi argues, Hamshaw’s
name was listed as the agent designated to receive notice for ship
owners in the Acomarit Ship Management Agreement with Marine
Atlantic Ltd. Ex. B to 4173. In an affidavit filed on March 22,

* Saudi states that the affidavit, which he previously had received as exhibit A
to Marine Atlantic Ltd.'s earlier motion to dismiss for lack of jurisdiction, lacked a
second page.

* Saudi fails to mention, but the letter makes clear, that at the time Marine
Atlantic, Ltd. was not party to this suit and had not been served. Nork expressly
informed Mr. Izen, “This office will not accept service of suit papers on behalf of
Marine Atlantic Ltd. at this time.”

106a

2000, Hamshaw identified himself as an “assistant secretary for
Marine Atlantic Ltd.,” but claimed he was not a registered agent for
service of process on Marine Atlantic Ltd., nor its president, trea-
surer, clerk or cashier, but was employed as Executive Vice Presi-
dent of Alpha Export Services, Inc. in New York City. He also
stated that Marine Atlantic Ltd. did not maintain a business office in
New York City. Ex. C.

Similarly, Greg Doyle, in a previously filed affidavit, identified
himself as “self-employed, “ and as “‘a chartering manager for the
vessel S/T Marine Atlantic.” He admitted working in the United
States, but maintained that he was not an employee of Marine At-
lantic Ltd. and that it did not have a business address in Massachu-
setts.’

Saudi asked for additional discovery to determine the precise
relationship of Hamshaw and Doyle to Marine Atlantic Ltd. and the
full extent of business and activities they carried out on its behalf in
the United States. New York Marine Managers, Inc. v. N.V. Topor-
1, 716 F. Supp. 783, 785 (S.D.N.Y. 1989) (foreign company’s
listing of a United States company’s office address as its own con-
stituted strong evidence that the foreign company was using the United
States company as its New York agent and the court had personal
jurisdiction; a foreign company cannot carry out business in the United
States through surrogates and thereby avoid the reach of personal
junsdiction).

Saudi charges that this evidence, viewed in a light

* Nork’s letter to Izen states the Nork’s firm, understands that Doyle “is not an
employee of Marine Atlantic Ltd.” and thus also would not likely appear for his
noticed deposition.

107a

favorable to him, “establishes that Marine Atlantic Ltd. has attempted
to order its affairs in such a manner as to carry out business through
executives or agents who are hired by other companies and per-
form acts which Marine Atlantic Ltd. would have to perform for
itself if these U.S. agents or employees were not available to do
so.” He claims that, like Tom Garrett, the ostensible employee of
Acomarit Services, Maritimes, $.A., Doyle and Hamshaw purport
to be employees of United States companies but are carrying out
activities for foreign companies in the United States. In a footnote
Saudi observes, “This carrying out of business through clandestine
surrogates in order to avoid the jurisdiction of the U.S. Courts is a
common theme in this case.” Instrument # 174 at 6 n.4.

In reply, Marine Atlantic Ltd. emphasizes that this Court, in an
order of August 31, 2000, entered on September 5, 2000 (# 159),
set aside the entry of default against Marine Atlantic Ltd. Marine
Atlantic Ltd. contends that that order bars Plaintiff from asserting
that Rule 4(k)(2)° jurisdiction exists over Marine Atlantic Ltd. be-
cause Rule 4(k) (2) jurisdiction is premised upon effective service
of summons or a valid waiver of service. Marine Atlantic Ltd. never
waived service of process, and the Court’s

*Fed. R. Civ. P. 4 (k) (2) reads,

If the exercise of jurisdiction is consistent with the Constitution
and laws of the Untied States, serving summons or filing a waiver
of service is also effective, with respect to claims arising under
federal law, to establish personal jurisdiction over the person of
any defendant who is not subject to the jurisdiction of the courts
or general jurisdiction of any state.

108a

order found that Marine Atlantic Itd. was not properly served with
process. Therefore the predicate requirement for application of 4(k)
(2) jurisdiction does noi exist and Plaintiff is barred by res judicata
or collateral estoppel frorm asserting that proper service occurred in
this case.° Furthermore, Plaintiff failed to serve Marine Atlantic Ltd.
within 120 days of the date of filing of the original complaint, as
required by Fed. R. Civ. P. 4(m) and failed to request timely an
extension of that time period. Saudi has not shown grounds for ex-
cusable neglect to support an extension of the service period. More-
over, Marine Atlantic Ltd. has never waived its affirmative defenses
of insufficiency of process and insufficiency of service of process.
Thus there is no basis to assert personal jurisdiction under Kule
4(k)(2) over marine Atlantic Ltd.

Moreover, urges Marine Atlantic Ltd., there is also no basis for
conducting additional jurisdictional discovery. Plaintiffhas had more
than fifteen months to conduct such discovery and has done noth-
ing. In sum, the Court should dismiss Marine Atlantic Ltd. from this
case for lack of personal jurisdiction.

This Court has indicated several times to Plaintiff's counsel that
the pa.ty that invokes a federal court’s jurisdiction bears the burden
of establishing minimum contacts that warrant the exercise of per-
sonal jurisdiction over a foreign defendant. Felch

° The Court agrees that by its express terms Rule 4(k)(2), providing for nation-
wide contacts where there is no personal jurisdiction over a foreign defendant in any
state, require “serving a summons or filing a waiver of service” to establish jurisdic-
tion.

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109a

v. Transportes Lar-Mex SA de CV, 92 F.3d 320, 324 (Sth Cir.
1996), citing Bullion v. Gillespie, 895 F.2d 213, 216 (Sth Cir. 1990).
Therefore Saudi’s efforts to place that burden on Marine Atlantic
Ltd. by arguing that it has avoided discussing its contacts with the
United States as a whole are misguided.

This Court agrees that Plaintiff has failed to show that valid
service of process was ever effected on Marine Atlantic Ltd., which
voluntarily appeared only after a default judgment was entered against
it and filed its answer (#95) asserting lack of personal jurisdiction as
its first defense. Moreover, Plaintiff has had subsiantial time to find
sufficient minimum contacts of Marine Atlantic Ltd. with Texas or, if
Rule 4 (k) (2) did apply, with the United States to justify this Court’s
assertion of personal jurisdiction over Marine Atlantic Ltd. Never-
theless he has failed to allege, no less support with evidence, the
existence of such contacts, but instead has indulged in mere suspi-
cion and speculation. Moreover, most of the arguments raised in
this motion and its response and reply are the same as those ruled
on by the Court in its detailed opinion entered on September 5,
2000 (#159), and they are still without supporting evidence or even
specific factual allegations. Furthermore on November 21, 2000
Judge Stacy granted Plaintiff leave to depose Hamshaw and, if he
could subpoena Doyle, Doyle. Instrument #202. Even after
Hamshaw’s deposition, the transcript of that deposition attached to
Saudi’s motion to resume that deposition (which was denied by
Magistrate Judge Stacy on December 20, 2000, #231) fails to re-
veal any contacts nationwide or in Texas that would support per-
sonal jurisdiction over Marine

110a

out of Atlantic Ltd. Saudi still’ has not shown any basis for conclud-
ing that Doyle and Hamshaw were authorized agents for service nor
that their activities, if any, on behalf of Marine Atlantic Ltd. in the
United States were sufficient to impose personal jurisdiction on Ma-
rine Atlantic Ltd.

Thus because of the exiensive time already allowed to Plaintiff
and his failure to discover ana prove any contacts Marine Atlantic
Ltd. with Texas or the United States, and given the long-past dis-
covery deadline of December 1, 2000, the Court

ORDERS that Marine Atlantic Ltd.’s motion to dismiss for lack
of personal jurisdiction is GRANTED without prejucice.

SIGNED at Houston, Texas, this 21‘ day of December, 2000.

MELINDA HARMON
UNITED STATES DISTRICT JUDGE

’ Docket call is set in this action on February 9, 2000, with trial to follow during
the next two weeks.

Illa

Appendix K
IN THE UNITED STATES DISTRICT COURT FOR THE
SOUTHERN DISTRICT OF TEXAS HOUSTON DIVISION

CIVIL ACTION NO. H-99-2367

CAPTAIN SHERIFF SAUDI,
Plainuff
VS
‘S/T MARINE ATLANTIC, Her Equipment and Appurtenances,
In Rem (a/k/a M/V Manine Atlantic, Her Equipment and Appur-
tenances, In Rem, a/k/a M/T Marine Atlantic, Her ENTERED
Equipment and Appurtenances, In Rem), MARINE ATLAN-
TIC, LTD., JOHN DOE COMPANY, Owner of the Vessel
Marine Atlantic, Michael N. Milby, Clerk ACOMARIT SER-
VICES MARITIMES, S.A., OSPREY ACOMARIT SHIP
MANAGEMENT, INC., VALMET- APPLETON, INC.,
APPLETON MACHINES CO. (Appleton Marine Division),
APPLETON MACHINE COY., INC., APPLETON MA-
RINE, INC., JOHN DOE COMPANY, Designer of the Crane,
KOCH PETROLEUM GROUP, L.P., JURONG SHIPYARD,
LTD. AND UNITED STATES TRUST COMPANY
OF NEW YORK,
Defendants

MEMORANDUM AND ORDER

Pending before the Court in the above referenced admiralty
and maritime personal injury action, arising from the May 17, 1999
fall of Plaintiff Captain Shenff Saudi (“Plaintiff’ or “Saudi’’) from a
lifting basket as he was transferred from the tanker Marine Atlantic
to the M/V American Discovery because of the collapse of an al-
legedly defective portside crane on the tanker Marine Atlantic, are
inter alia Plaintiff’s motion for leave to file fourth amended com-
plaint (#188) and motion for leave to file

112a

fifth amended complaint (#205), and Defendants Marine Atlantic
Ltd. and Osprey Ship Management, Inc.’s (“Osprey’s”) related mo-
” tion to strike Plaintiff’s jury demand (part of #192).

Plaintiff's motion for leave to file fifth amended complaint (#205),
which would appear to supersede the motion to file the fourth, as-
serts that Plaintiff seeks amendment to delete Defendants that were
dismissed from this action previously by the Court and to conform
the allegations supporting his causes of action to facts and evidence
gathered during discovery.

Defendants Marine Atlantic Limited and Osprey Ship Manage-
ment Inc. (““Osprey”’) object thai the proposed fifth amended com-
plaint for the first time in this litigation, and only after Defendants
have filed a motion to strike Plaintiff’s jury demand, alleges there is
diversity jurisdiction in this action. Defendants have steadily ob-
jected to the jury demand because Saudi has always asserted ad-
miralty and maritime jurisdiction, which does not entitle him to a
jury. Harrison v. Flota Mercante Grancolombiana. S.A., 577 F.2d
968, 986 (Sth Cir. 1978), reyecting Saudi’s authority for amend-
ment and jury demand, Oroco Marine, Inc. v. National Marine Ser-
vice, Inc., 71 F.R.D. 220 (S.D. Tex. 1976). Defendants also em-
phasize that the deadline for amending pleadings was November |,
2000. Moreover, they complain that the application of diversity ju-
risdiction would change the substantive law from federal maritime
law to state law; they maintain there is no basis for the application of
state law here because the tort claims

ll3a

involve conduct aboard a foreign flag vessel on the high seas and
the alleged refurbishment of the tanker Marine Atlantic occurred
pursuant to a maritime shipyard contract that is subject to the Court’s
admiralty jurisdiction. The Jack-O-Lantern New Bedford Dry Dock
Co. v. Purdy, 258 U.S. 96, 99-100 (1922) (a contract for repair or
reconstruction of a ship is a maritime contract subject to the court’s
admiralty jurisdiction); La Esperanza de P.R., Inc. v. Perez Y Cia.
De Puerto Rico, Inc., 124 F.3d 10, 16 (1st Cir. 1997) (“contracts
for repairs to a vessel or for its substantial. reconstruction come
under the scope of admiralty jurisdiction’), citing Kossick v. United
Fruit Co., 365 U.S. 731, 735 (1961) (contrasting ship repair and
new ship construction). Thus claim Defendants, they would be sub-
stantially prejudiced by i. _ fifth amended complaint.

Marine Atlantic Ltd. and osprey have also moved to strike
Plaintiff’s jury demand (part of #192). These Defendants argue that
Saudi is not entitled to a jury trial because his remaining negligence
claims are based on general maritime law since they are claims for
alleged maritime tort committed on the high seas. Dean v. Chesa-
peake Bay Ferrv Dist., 158 F. Supp. 408, 410 (E.D. Va. 1958)(“Au-
thorities are legion to the effect that every species of tort, however
occurring and whether on board a vessel or not, if upon the high
seas or navigable waters, is of admiralty cognizance, providing that
the substance and consummation of the wrong and injury take place
upon these waters.’’). General maritime law does

ll4a

not afford a right to a jury trial. In re Consolidation Coal, 123 F.3d
126, 132, 134 (3d Cir. 1997)(“There is no right to a jury in actions
instituted in admiralty ... .””), cert. denied sub nom. Newman v.
Consolidation Coal Co., 523 U.S. 1054 (1998); Concordia Co.,
Inc. v. Panek, 115 F.3d 67, 70 (1st Cir. 1997) (“Generally, there is
no constitutional right to a jury trial for admiralty claims), citing
Fitzgerald v. United States Lines Co., 374 U.S. 16, 19 (1963). See
also Durden v. Exxon Corp., 803 F.2d 845, 848-50 (Sth Cir. 1986)
(where Jones Act claim was properly dismissed leaving only claims
for unseaworthiness and negligence, plaintiff was not entitled to a
jury trial); T.N.T. Marine Serv. Inc. v. Weaver Shipyards & Dry
Docks, Inc., 702 F.2d 585, 587 (Sth Cir. 1983) (Fed. R. Civ. P. 9
(h) “makes clear that Rule 38 (e) denies a nght to trial by jury on
any claim that is cognizable only in admiralty, regardless of what the
pleading says.”’), cert. denied, 467 U.S. 847 (1983).

Saudi responds that he is entitled to a jury trial because there is
diversity jurisdiction here over his claim for negligence under com-
mon law, product liability, and breach of warranty arisiag out of the
negligent refurbishment of the vessel at the Keppel Shipyards in
Singapore. His jury demand has been on file since the beginning of
this suit. Conti v. Sanko S.S. Co., Ltd., 912 F.2d 816 (Sth Cir.
1990) (hodling that district court’s refusal to allow longshoreman to
amend his pleadings so that the sole basis for jurisdiction was diver-
sity was an abuse of

11Sa

discretion). Thus Defendants’ objections to his motions for leave to
amend on the grounds that he is simply attempting to delete any
reference to admiralty jurisdiction are unfounded. A plaintiff with a
state common-law cause of action that also falls under admiralty
jurisdiction may elect to bring suit either as an admiralty action in
federal court or as a state common-law action in state court or
federal court as long is it meets jurisdictional requirements. 28 U.S.C.
S 1331(1); T.N.T. Service v. Weaver Shipyards & Dry Docks,
Inc., 702 F.2d 585. Contrary to Defendants’ argument, not all tor-
tious acts complained of here were committed on the high seas;
Saudi has also alleged that MTL and MTC reactivated the vessel in
dry dock in Singapore. He therefore has a right to a jury trial on
these claims, based on diversity jurisdiction. Moreover, because
these claims arise out of the same facts as those supporting his tort
claims against Marine Atlantic Ltd. and osprey for acts committed
on the high seas, Saudi insists he is entitled to a jury trial on all his
claims. Oroco Marine, Inc. v. Nat. Marine Service, Inc., 71 F.R.D.
220 (S-D. Tex. 1976) (holding that the absence of admiralty desig-
nation under the rule in the third-party complaint plus the presence
ot diversity jurisdiction over the third-party claim mandated that the
third party’s jury ,equest be granted).'
In reply, Marine Atlantic Ltd. and Osprey observe that

'The Court notes that the Fifth Circuit rejected Oroco’s holding in Harrison v.
Flota Mercante Grancolombiana, S.A., 577 F.2d 968, 987 (Sth Cir. 1978)

ll6a

although Saudi filed this action in August 1999, not until Defendants
filed a motion to strike Saudi’s jury demand did he assert, on No-
vember 24, 2000, the existence of diversity jurisdiction, well after
the deadline for amending pleadings, i.e., November |, 2000. He
has no excuse for such an untimely assertion of jurisdiction. Fur-
thermore Defendants have never consented to Plaintiff’s jury de-
mand and their respective answers to Saudi’s pleadings have con-
tinuously objected to Saudi’s claim that he is entitled to a jury. Saudi
has always asserted that his case is founded in admiralty and mari-
time jurisdiction, under which he does not have a nght to a jury trial.
They claim they are prejudiced by the untimely assertion of diversity
jurisdiction in his proposed fifth amended complaint. Moreover, the
application of diversity jurisdiction changes the applicable substan-
tive law, from federal maritime law to state law. They argue that
state law does not apply because the alleged tortious conduct in-
volving them occurred ab

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Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40386020_1625%3A2. Public record. Not legal advice.