Holt v. Klosters Rederi A/S

Decision Date12 February 1973
Docket NumberNo. G-245-71 CA.,G-245-71 CA.
PartiesJames E. HOLT, individually, as Administrator of the Estate of Lenora Allene Holt, deceased, and as guardian of Michael Christopher Holt, a minor, Plaintiffs, v. KLOSTERS REDERI A/S, Defendant.
CourtU.S. District Court — Western District of Michigan

COPYRIGHT MATERIAL OMITTED

John L. Foster, Foster, Meadows & Ballard, Detroit, Mich., for plaintiff.

Timothy D. Wittlinger, Hill, Lewis, Adams, Goodrich & Tait, Detroit, Mich., and James M. Estabrook, Haight, Gardner, Poor & Havens, New York City, for defendant.

OPINION

ENGEL, District Judge.

Plaintiff, a Michigan citizen, commenced this admiralty action against Klosters Rederi A/S, an alien corporation, seeking pecuniary loss for the death of plaintiff's wife. Plaintiff alleges that the death of his wife was proximately caused by defendant's failure to provide her with adequate medical treatment when she became ill in the midst of a Caribbean Cruise. Plaintiff seeks recovery under Death on the High Seas Act, 46 U.S.C.A. §§ 761-768.1

Plaintiff alleges in his complaint that he and his wife boarded defendant's ship, M/V Skyward at Port Everglades, Florida, on March 20, 1971; that thereafter the Skyward embarked upon a cruise through the Caribbean; that once under way, plaintiff's wife became ill; that the ship's doctor misdiagnosed her illness as seasickness; that the failure of the ship's doctor to provide proper medical treatment led to a deterioration in plaintiff's wife's condition; that although the ship's captain knew of plaintiff's wife's distress, he did not take proper precautionary measures; that by the time the Skyward docked in San Juan, Puerto Rico, plaintiff's wife was in dire need of emergency care and surgery; and that although surgery was ultimately performed, plaintiff's wife died on March 25, 1971.

Defendant moves to dismiss this suit or in the alternative to have this suit transferred to a more convenient forum in the Southern District of Florida. Both parties have submitted briefs on the several issues raised and have agreed that the court may consider the several affidavits on file as well as the deposition of Frederick N. Metcalf, vice president of sales of the defendant corporation.

Motion to Dismiss

Defendant contends that it is entitled to a dismissal because it does not maintain the requisite contacts with Michigan to enable this court to render a binding personal judgment against it. Defendant, as well as plaintiff, relies upon the Michigan jurisdictional statutes and case law in support of their respective positions. However, this is not a diversity case and accordingly, the principles of Erie R. Co. v. Tompkins, 304 U.S. 64, 58 S.Ct. 817, 82 L.Ed. 1188 (1938) do not apply. Plaintiff predicates subject matter jurisdiction and his right of recovery upon federal law exclusively. 28 U.S.C.A. § 1333; 46 U.S.C.A. §§ 761-768. Therefore federal law and not state law is controlling. Angel v. Bullington, 330 U.S. 183, 67 S.Ct. 657, 91 L.Ed. 832 (1947); Levinson v. Deupree, 345 U.S. 648, 73 S.Ct. 914, 97 L. Ed. 1319 (1953) and see Scott v. Middle East Airlines Co., S. A., 240 F.Supp. 1 (S.D.N.Y.1965).

The import of this holding is twofold: (1) Where a defendant challenges the court's jurisdictional power to render a binding judgment on federal questions, the court must examine the facts in light of the constitutional proscriptions of the due process clause of the Fifth rather than the Fourteenth Amendment, Edward J. Moriarty & Co. v. General Tire and Rubber Co., 289 F. Supp. 381 (S.D.Ohio 1967); First Flight Co. v. National Carloading Corp., 209 F.Supp. 730 (E.D.Tenn.1962); and see Gkiafis v. Steamship Yiosonas, 342 F.2d 546 (4th Cir. 1965),2 and (2); the inquiry is thus expanded to ascertaining whether defendant has the requisite minimum contacts3 with the United States as an entity rather than the forum state in which the federal court sits. As the court observed in Moriarty, 289 F.Supp. page 390:

Thus, in our view, the judicial jurisdiction over the person of the defendant does not relate to the geographical power of the particular court which is hearing the controversy, but to the power of the unit of government of which that court is a part. The limitations of the concept of personal jurisdiction are a consequence of territorial limitations on the power of the respective forums. Thus, as applied to the states, the constitutional test for personal jurisdiction involves a determination as to whether the defendant has certain minimal contacts with the forum state, such that the maintenance of the suit does not offend traditional notions of fair play and substantial justice. International Shoe Co. v. State of Washington, 326 U.S. 310, 66 S.Ct. 154, 90 L.Ed. 95 (1945).
By the same token, we feel that the appropriate inquiry to be made in a federal court where the suit is based upon a federally created right is whether the defendant has certain minimal contacts with the United States, so as to satisfy due process requirements under the Fifth Amendment. For a thorough discussion of this theory, see Green, "Federal Jurisdiction in Personam of Corporations and Due Process," 14 Vanderbilt L. Rev. 967 (1961); Note "Jurisdiction of Federal District Courts over Foreign Corporations," 69 Harv.L.Rev. 508 (1956). Also see, Jaftex Corp. v. Randolph Mills, Inc., 282 F.2d 508 (2 Cir., 1960); Gkiafis v. Steamship Yiosonas, 342 F.2d 546 (4 Cir., 1965); Mutual International Export Co. v. Napco Industries, Inc., 114 U.S.App. D.C. 392, 316 F.2d 393 (1963); Lone Star Package Car Co. v. Baltimore & O. R. Co., 212 F.2d 147 (5 Cir., 1954); Goldberg v. Mutual Readers League, Inc., 195 F.Supp. 778 (E.D.Pa., 1961); Bar's Leaks Western v. Pollock, 148 F.Supp. 710 (N.D.Cal., 1957); Singleton v. Atlantic Coast Line R. R. Co., 20 F.R.D. 15 (E.D.Mich., 1956).

Assuming that a court finds that a defendant has maintained such minimum contacts with the United States, a federal court may nonetheless be restricted in exercising its nationwide in personam power if Congress or the Supreme Court sees fit to limit it. Such limitations may be found in venue statutes, the Federal Rules of Civil Procedure and also within the federal statute from which a plaintiff derives his rights and remedies. See People's Tobacco Co. v. American Tobacco Co., 246 U.S. 79, 38 S.Ct. 233, 62 L.Ed. 587 (1918). Unless objection is made to the exercise of this territorial jurisdiction, however, the court has the power to render an in personam judgment.

Defendant's motion to dismiss challenges this court's power to render an in personam judgment only. All other objections which defendant may have raised by such motion have been waived.4 As the issue is thus framed, the court must examine the facts of this case as reflected in the deposition and affidavits on file.

Defendant is a Norwegian corporation with its head office in Oslo, Norway. It owns and operates a fleet of ships under the trade name of Norwegian Caribbean Lines (NCL). The fleet, of which the M/V Skyward is a member, operates principally in and through the Caribbean Sea.

The individual and group tours which NCL offers embarks exclusively from Miami, Florida. NCL has no other ports-of-call within the continental United States. Although NCL maintains branch offices in several cities throughout the United States, it draws 42% of its passenger traffic from Florida alone. Arison Shipping Company, a Florida corporation, was NCL's general sales agent until February of 1972.

NCL has other important market areas from which it draws its business. Some are New York, Chicago, Cleveland, Dallas, and Los Angeles. NCL brochures reflect that it maintains offices in all these locations.

Business is solicited from other minor areas also. Such solicitation is done through travel agencies rather than on an individual passenger basis. Travel agencies are supplied with NCL's literature and when an individual or group wishes to take an NCL cruise, the agency will confirm that there is space available. The travel agencies do not write the tickets. The tickets are issued through an NCL office either in Chicago, Miami or New York.

In this case, plaintiff's cruise contract was...

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