521 F.3d 122 (2nd Cir. 2008), 06-5397, Porina v. Marward Shipping Co., Ltd.

Docket Nº:Docket No. 06-5397-cv.
Citation:521 F.3d 122
Party Name:Victorija PORINA, as personal representative of Arnis Porins, deceased, Lubova Boilovica, as personal representative of Victor Boilovic, deceased, Jekaretina Jemeliganova, as personal representative of Vladimir Lisenko, deceased, Karlis Pukitis, as personal representative Ignus Pukitis, deceased, Martin Zakalovskis, as personal representative of Ja
Case Date:April 01, 2008
Court:United States Courts of Appeals, Court of Appeals for the Second Circuit
 
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521 F.3d 122 (2nd Cir. 2008)

Victorija PORINA, as personal representative of Arnis Porins, deceased, Lubova Boilovica, as personal representative of Victor Boilovic, 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.

April 1, 2008

Argued: Dec. 17, 2007.

Appeal from an August 24, 2006 order of Judge Patterson in the United States District Court for the Southern District of New York, Robert P. Patterson, Jr., J., 2006 WL 2465819, dismissed the complaint for lack of personal jurisdiction.

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[Copyrighted Material Omitted]

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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

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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...

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