Marinechance Shipping, Ltd. v. Sebastian

• Decision Date: 22 June 1998
• Docket Number: No. 97-30844,97-30844
• Citation: 143 F.3d 216
• Parties: MARINECHANCE SHIPPING, LTD., Plaintiff-Appellee, v. Fernando SEBASTIAN; Raul Galedo, Defendants-Appellants.
• Court: U.S. Court of Appeals — Fifth Circuit

Page 216

143 F.3d 216

1998 A.M.C. 2819

MARINECHANCE SHIPPING, LTD., Plaintiff-Appellee, v. Fernando SEBASTIAN; Raul Galedo, Defendants-Appellants.

No. 97-30844.

United States Court of Appeals,

Fifth Circuit.

June 22, 1998.

David B. Lawton, Gerald Martin Baca, Larry R. DeBuys, IV, Terriberry, Carroll & Yancy, New Orleans, LA, Plaintiff-Appellee.

David C. Vidrine, Richard J. Dodson, Dodson & Vidrine, Baton Rouge, LA, for Defendant-Appellant.

Appeal from the United States District Court for the Eastern District of Louisiana.

Before WISDOM, HIGGINBOTHAM, and JONES, Circuit Judges.

WISDOM, Senior Circuit Judge:

Fernando Sebastian and Raul Galedo ("the seamen") filed this admiralty suit against Marinechance Shipping Ltd. (Marinechance) seeking damages for injuries incurred while aboard the M/V ELLISPONTOS. In a carefully reasoned and well-researched decision, district Judge Feldman granted Marinechance's motion for a partial summary declaratory judgment, finding that the forum selection clauses in the seamen's contracts required their causes of action to be filed in the Republic of the Philippines. We affirm.

I.

The seamen, both citizens of the Philippines, were injured in an accident aboard the M/V ELLISPONTOS while in the navigable waters of the Mississippi River near Burnside, Louisiana. They were transported to a hospital in Baton Rouge for treatment.

The M/V ELLISPONTOS is owned by Marinechance, a corporation with its principal place of business in Nicosia, Cyprus. Marinechance filed this suit in the federal district court ¹ seeking a declaratory judgment that any litigation arising from the accident must proceed, if at all, in the courts of the Philippines under the law of the Philippines. Marinechance also sought to limit its liability under the Limitation of Liability Act. ² The district court enjoined the seamen from filing suit in the Louisiana state courts.

The seamen filed a motion to dismiss Marinechance's declaratory action and to lift the stay of proceedings. A few months later, before the district court ruled upon the seamen's motion, Marinechance filed a motion for partial summary judgment on the declaratory action. The district court granted a partial summary judgment in favor of Marinechance, finding that the forum selection clauses in the seamen's contract and the relevant laws and treaties required this suit to be maintained in the Philippine courts. The district court did not rule upon the seamen's motions.

The seamen appeal. This Court has jurisdiction to hear the seamen's appeal from the declaratory judgment under 28 U.S.C. § 1292(a)(3). The seamen's appeal from the refusal to lift the stay of proceedings is a different matter, however. Although this court has jurisdiction to hear appeals from the continuance or granting of an injunction under 28 U.S.C. § 1292(a)(1), the district court did not do either; it declined to decide the issue until the parties submitted a new motion and briefs on the status of the issue after the court's ruling on the declaratory judgment. Recognizing this problem, the seamen request that this Court treat their brief as a petition for a writ of mandamus on this issue.

II.

First, the seamen argue that the district court was required to lift the automatic stay of proceedings under the Limitation of Liability Act because they entered into the following stipulations: (1) they would not seek damages in excess of the limitation amount, (2) they agreed not to challenge Marinechance's right to have the federal court determine the issue of exoneration or limitations of damages after the state-court trial on the merits, and (3) they agreed to waive any claim of res judicata arising from the state court proceedings on the issue of limited liability. In Texaco v. Williams, this Court found that a stay of proceedings should be lifted so that the claimants may assert their actions in state court under the Savings to Suitors Clause of 28 U.S.C. § 1333 if these stipulations are made. ³ The seamen's stipulations were identical with those in Texaco.

Instead of ruling upon the seamen's motion to lift the stay, the district court entered a declaratory judgment in favor of Marinechance, finding that this suit must proceed, if at all, in the Philippines. The district court noted that the parties should file a new motion and briefs on the effect of the declaratory judgment on their request to lift the stay. In effect, however, the declaratory judgment mooted the motion to lift the stay. The seamen argue that the district court's declaratory judgment should be reversed and the district court should be compelled to lift the stay of proceedings so that this action can be maintained in the Louisiana courts. They argue that any issue of choice of laws or choice of forum may be addressed fully in the state court. Marinechance maintains that the district court merely exercised its discretion to control its docket by deciding an issue that was dispositive of the case before reaching any other issues.

This Court will grant a writ of mandamus only when there is a "usurpation of judicial power" or a clear abuse of discretion. ⁴ In this case, the district court did not clearly abuse its discretion. The district court possesses the inherent power to control its docket. ⁵ This power includes the authority to decide the order in which to hear and decide pending issues. ⁶ The district court used its discretionary authority to handle this case in the most efficient way; the court ruled upon the potentially dispositive issue first.

III.

The seamen also argue that the district court erred in granting a declaratory judgment because Marinechance filed its declaratory action in anticipation of a suit in state court. They maintain that this is a type of forum shopping condemned by this Court. Marinechance argues that the district court properly exercised its discretion to grant declaratory relief.

A district court's decision to grant or to deny declaratory relief is reviewed for abuse of discretion. ⁷ In Rowan Companies v. Griffin, this Court listed several factors to consider when deciding whether to grant declaratory relief.

For example, declaratory relief may be denied because of a pending state court proceeding in which the matters in controversy between the parties may be fully litigated, because the declaratory complaint was filed in anticipation of another suit and is being used for the purpose of forum shopping, because of possible inequities in permitting the plaintiff to gain precedence in time and forum, or because of inconvenience to the parties or the witnesses. ⁸

The second situation listed is most applicable to this suit. Without question, Marinechance filed this declaratory action in anticipation of the seamen's suit in the state courts. The question is whether Marinechance was engaged in forum shopping. The district court found that it was not. Marinechance was not attempting to litigate its claims in federal court instead of state court, nor was it trying to obtain a bench trial instead of a jury trial. Rather, Marinechance was seeking to enforce its choice of forum provisions requiring the suit to be pursued in the Philippines. This declaratory action was the most efficient means of invoking its rights under the contract.

The seamen argue that this result destroys the policies underlying the savings to suitors clause because it deprives the seamen of their choice of a state court forum. Rule 57 of the Federal Rules of Civil Procedure expressly states that the availability of an alternative remedy does not prevent the district court from granting a declaratory judgment. Even if the seamen were able to bring this action in the state court, the Louisiana Supreme Court's decision in Lejano v. K.S. Bandak shows that the same result would follow because the court would apply federal law to determine the validity of the choice of forum provisions. ⁹ The seamen were not denied the traditional benefits of the savings to suitors clause. ¹⁰ The district court did not abuse its discretion, then, by granting declaratory relief. Instead, the district court's decision ensured that Marinechance's rights were protected at the earliest possible time. This is the primary goal of declaratory action. ¹¹

IV.

Finally, the seamen argue that the district court erred in granting a partial summary judgment enforcing the forum selection clauses in the seamen's employment contracts. The seamen were employed under a contract (the Employment Contract) approved by the Philippine Overseas Employment Administration (POEA) ¹². That contract provides that:

All claims, complaints or controversies relative to the implementation and interpretation of this overseas employment contract shall be exclusively resolved through the established grievance machinery in the Revised Employment Contract for Seafarers, the adjudication procedures of Philippine Overseas Employment Administration and the Philippine Courts of Justice, in that order.

The Employment Contract also states that: "[t]he terms and conditions of the revised Employment Contract for seafarers governing the employment of Filipino seafarers approved by the POEA ... shall be strictly and faithfully observed." The Revised Employment Contract for Seafarers (the Revised Contract) includes the following provisions:

Section 28 Jurisdiction

The Philippine Overseas Employment Administration (POEA) or the National Labor Relations Commission (NLRC) shall have original and exclusive jurisdiction over any and all disputes or controversies arising out of or by virtue of this Contract ...

Section 29 Applicable Law

All rights and obligations of the parties to this Contract, including the annexes thereof, shall be governed by the laws of the Republic of the Philippines, International Conventions, Treaties and covenants where the Philippines is a signatory.

The Revised Contract incorporates the Migrant Workers' and Overseas Filipinos' Act of 1995 which grants the...