Porina v. Marward Shipping Co., Ltd.

• Decision Date: 01 April 2008
• Docket Number: Docket No. 06-5397-cv.
• Citation: 521 F.3d 122
• Parties: Victorija PORINA, as personal representative of Amis Porins, deceased, Lubova Boilovica, as personal representative of Victor Boilovica, deceased, Jekaretina Jemeliganova, as personal representative of Vladimir Lisenko, deceased, Karlis Pukitis, as personal representative Ignus Pukitis, deceased, Martin Zakalovskis, as personal representative of Janis Zakalovskis, deceased, Tamara Nazarova, as personal representative of Igors Nazarovs, deceased and Sia "bute", Plaintiffs-Appellants, v. MARWARD SHIPPING CO., LTD., Defendant-Appellee.
• Court: U.S. Court of Appeals — Second Circuit

521 F.3d 122

Victorija PORINA, as personal representative of Amis Porins, deceased, Lubova Boilovica, as personal representative of Victor Boilovica, deceased, Jekaretina Jemeliganova, as personal representative of Vladimir Lisenko, deceased, Karlis Pukitis, as personal representative Ignus Pukitis, deceased, Martin Zakalovskis, as personal representative of Janis Zakalovskis, deceased, Tamara Nazarova, as personal representative of Igors Nazarovs, deceased and Sia "bute", Plaintiffs-Appellants, v. MARWARD SHIPPING CO., LTD., Defendant-Appellee.

Docket No. 06-5397-cv.

United States Court of Appeals, Second Circuit.

Argued: December 17, 2007.

Decided: April 1, 2008.

Megan Benett (Paul S. Edelman, on the brief), Kreindler & Kreindler, New York, N.Y., for Plaintiffs-Appellants.

John D. Kimball, Blank Rome LLP, New York, N.Y., for Defendant-Appellee.

Before: JACOBS, Chief Judge, CALABRESI, and RAGGI; Circuit Judges.

CALABRESI, Circuit Judge:

In May 2004, a Latvian fishing vessel called the Astrida sank in Swedish waters; the vessel was lost and its six crew members perished. Plaintiffs, the owner of the Astrida and representatives of the deceased fishermen, brought suit in the Southern District of New York against Marward Shipping Co. ("Marward"), the owner of a ship called the Vladimir. Plaintiffs assert that the Vladimir struck the Astrida, and that the collision resulted from the negligence of those operating the Vladimir. Marward, instead, maintains that the Vladimir had nothing to do with the accident. We do not, however, consider that question, because we hold that the federal district court could not, consistently with the Constitution's guarantee of due process, exercise personal jurisdiction over Marward.

BACKGROUND

I. Facts

The M/V Vladimir is a cargo ship.¹ Before Marward purchased the Vladimir, the vessel was owned by a Cypriot company called Florani Shipping Co. ("Florani"). On September 20, 2002, Florani time-chartered the Vladimir to a Maltese company called Ambery Maritime Ltd. ("Ambery"). The charter gave Ambery the use of the Vladimir's cargo-carrying capacity, and the right to direct the ship's course "for worldwide trading in Charterers' option via good, safe, berth(s)/good, safe port(s)." The contract listed the intended area of service as: "U.S. Gulf, Carribbian [sic] Sea, U.S. East Coast/Canada, North Continent, United Kingdom and Baltic ports including Gulf of Finland and St. Petersburg, Russia." While subject to the 2002 charter, the Vladimir sailed as one of seven "specialized multipurpose vessels dedicated to U.S. trade"; these vessels comprised a carrier fleet advertised as "the only direct non-stop liner service to Russia from USA." The Vladimir docked over sixty times in the United States between April 2000 and March 2004.

Marward has its sole place of business in Limassol, Cyprus, and is incorporated under Cypriot law. On March 29, 2004, six weeks before the Astrida sank, Marward bought the Vladimir from Florani. The purchase was subject to the 2002 charter with Ambery, which remained in effect until June 2004. When ownership was transferred to Marward, the Vladimir was in port at St. Petersburg. The ship continued its transatlantic service three days later and again set off for the United States. After calling at Baltimore between April 16, 2004, and April 27, 2004, the Vladimir sailed back across the Atlantic to Russia, via Denmark.

On May 10, 2004, during the Vladimir's first return voyage to Russia under Marward's ownership, the Astrida sank on the Baltic Sea. After the alleged collision, the Vladimir arrived as scheduled at St. Petersburg. The Maritime Administration of Latvia ("MAL"), suspecting that the Vladimir was involved in the accident, asked the St. Petersburg Port State Control Inspectorate to examine the ship's hull. Having done so, the Russian investigators stated that they saw no evidence of a recent collision. The Latvian authorities, not satisfied with this answer, then asked if they could come to St. Petersburg themselves to conduct a second inspection. This request was denied by the Harbormaster of St. Petersburg because "a repeated inspection of the hull of m/v V[LA]DIMIR would cause the vessel's demurrage and losses to its owner since the vessel had already received permission to leave the port, and, therefore, it was offered to the representatives of the MAL to perform the inspection at the next port of call."

The next port of call was Baltimore. There, the MAL, accompanied by representatives of Marward, the United States Coast Guard, and divers from private companies, conducted a full investigation. The Vladimir's master produced no course records for the period relevant to the alleged collision, declaring that "the course recorder did not operate due to technical reasons." Nevertheless, the inspectors concluded that the Vladimir and the Astrida had, in fact, collided. The report noted hull damage that was consistent with impact against the port side of the Astrida, including "[m]aroon dashes" that "could only be left by a foreign body" and were "visually the same colour" as the Astrida's hull.

After the inspection, the Vladimir continued its transatlantic journeys. When, in June 2004, the Ambery charter expired, Marward entered into a similar arrangement with another charterer. While under Marward's ownership, but always at the direction of its charterers, the vessel called at United States ports at least sixteen times between March 29, 2004, and September 22, 2005.²

II. Procedural Background

Seeking damages for wrongful death and for the loss of the Astrida, plaintiffs brought suit in the Southern District of New York on June 16, 2005 against various parties; they did not at first include Marward. On September 22, the plaintiffs filed a motion to amend the complaint, to add Marward. The motion was granted with Marward's consent, and the other parties were subsequently dropped from the case.

Marward then moved to dismiss the complaint for lack of personal jurisdiction.³ Judge Patterson granted the motion, concluding that plaintiffs had failed to make a prima facie showing that Marward had sufficient contacts with the United States to justify the assertion of personal jurisdiction.⁴ Porina v. Marward Shipping Co., Ltd., No. 05 CIV. 5621, 2006 WL 2465819 (S.D.N.Y. Aug. 24, 2006). This appeal followed.

DISCUSSION

We review de novo a district court's decision to dismiss a complaint for lack of personal jurisdiction. DiStefano v. Carozzi N. Am., Inc., 286 F.3d 81, 84 (2d Cir.2001). Where, as here, a district court relies on the pleadings and affidavits, and chooses not to conduct a "full-blown evidentiary hearing," plaintiffs need only make a prima facie showing of personal jurisdiction over the defendant. Id. (quoting Marine Midland Bank, N.A. v. Miller, 664 F.2d 899, 904 (2d Cir.1981)). In reviewing the dismissal, we construe the pleadings and affidavits in the light most favorable to plaintiffs, resolving all doubts in their favor. Id.

Plaintiffs do not assert that Marward has sufficient contacts with the state of New York to fall within the purview of that state's long-arm statute. Instead, plaintiffs rely on Federal Rule of Civil Procedure 4(k)(2):⁵

For a claim that arises under federal law, serving a summons or filing a waiver of service establishes personal jurisdiction over a defendant if:

(A) the defendant is not subject to jurisdiction in any state's courts of general jurisdiction; and

(B) exercising jurisdiction is consistent with the United States Constitution and laws.

Rule 4(k)(2) was specifically designed to "correct[] a gap" in the enforcement of federal law in international cases. Fed R. Civ. P. 4 advisory committee's note, 1993 Amendments. The gap arose from the general rule that a federal district court's personal jurisdiction extends only as far as that of a state court in the state where the federal court sits. Before the 1993 amendments, even where a state's long-arm statute would have permitted jurisdiction, the majority of courts to consider the question took the view that former Federal Rule of Civil Procedure 4(e) required a "lockstep" approach to the question of whether a federal court could, consistently with due process, exercise personal jurisdiction over a non-resident defendant. See United Rope Distribs., Inc. v. Seatriumph Marine Corp., 930 F.2d 532, 535 (7th Cir. 1991). On the "lockstep" view, federal district courts could look only to the defendant's contacts with the individual state where the federal court was located, and not to any other contacts with the United States. See, e.g, DeMelo v. Toche Marine, Inc., 711 F.2d 1260, 1264-69 (5th Cir.1983). The pre-1993 Rules, the Advisory Committee noted, left a significant lacuna "when the defendant was a non-resident of the United States having contacts with the United States sufficient to justify the application of United States law and to satisfy federal standards of forum selection, but having insufficient contact with any single state to support jurisdiction under state long-arm legislation or meet the requirements of the Fourteenth Amendment limitation on state court territorial jurisdiction." Fed R. Civ. P. 4 advisory committee's note, 1993 Amendments.

Accordingly, Rule 4(k)(2) now allows the exercise of personal jurisdiction by a federal district court when three requirements are met: (1) the claim must arise under federal law; (2) the defendant must not be "subject to jurisdiction in any state's courts of general jurisdiction"; and (3) the exercise of jurisdiction must be "consistent with the United States Constitution and laws." Plaintiffs' suit relies on general maritime law; their claim, therefore, is one that "arises under federal law" for the purposes of Rule 4(k)(2).⁶ World Tanker Carriers Corp. v. M/V Ya Mawlaya, 99 F.3d 717, 723 (5th Cir.1996); Norvel Ltd. v. Ulstein Propeller AS, 161 F.Supp.2d 190, 200 (S.D.N.Y.2001). But defendant...