63 F.3d 166 (3rd Cir. 1995), 93-2069, Neely v. Club Med Management Services, Inc.

Docket Nº:Eileen Anne NEELY, Appellant in No. 93-2069,
Citation:63 F.3d 166
Case Date:July 26, 1995
Court:United States Courts of Appeals, Court of Appeals for the Third Circuit
 
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Page 166

63 F.3d 166 (3rd Cir. 1995)

Eileen Anne NEELY, Appellant in No. 93-2069,

v.

CLUB MED MANAGEMENT SERVICES, INC.; Club Med Sales, Inc.;

Club Med, Inc., Third-Party Plaintiffs; Holiday

Village (St. Lucia), Ltd.

v.

Joseph LEMAIRE, Third-Party Defendant,

Club Med Management Services, Inc. and Holiday Village (St.

Lucia) Inc., Appellants in No. 93-2102.

Nos. 93-2069, 93-2102.

United States Court of Appeals, Third Circuit

July 26, 1995

Argued Aug. 8, 1994.

Reargued En Banc Feb. 7, 1995.

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M. Kelly Tillery (argued), Michael V. Tinari, Barry L. Cohen, Leonard, Tillery & Sciolla, Philadelphia, PA, for Eileen Anne Neely.

Bettina B. Plevan (argued), John Siegal, Monique A. Tuttle, Proskauer, Rose, Goetz & Mendelsohn, New York City, for Club Med Management Services, Inc.; Club Med Inc.; Holiday Village (St. Lucia), Ltd.

Louis Bell, Marshall, Dennehey, Warner, Coleman & Goggin, Philadelphia, PA, for Club Med Management Services, Inc.; Holiday Village (St. Lucia), Ltd.

TABLE OF CONTENTS Introduction ................................................................... 170 I. Facts and Procedural History .............................................. 171 II. The Lauritzen Triad and Subject Matter Jurisdiction ................... 174 A. The Non-Jurisdictional Nature of the Lauritzen Choice-of-Law Analysis 174 B. Federal Question and Admiralty Jurisdiction ............................ 178 1. Federal Question Jurisdiction Under 28 U.S.C. § 1331 ................ 178 2. Admiralty Jurisdiction Under 28 U.S.C. § 1333 ....................... 178 III. Applicability of American Law Under the Lauritzen Triad ................... 180 A. Introduction ........................................................... 180 B. Purposes of and Problems with the Lauritzen Analysis ................... 181 C. The Two Steps of the Lauritzen Choice of Law Inquiry ................... 182 1. Do the Contacts Show a Basis for Prescriptive Jurisdiction? ......... 184 2. Are the Contacts Such That Application of American Law Would Be Reasonable? ......................................................... 186 a. Inaccessibility of a Foreign Forum ............................... 190 b. Law of the Forum ................................................. 190 c. Place of the Wrongful Act ........................................ 190 d. Place of Contract ................................................ 192 e. Law of the Flag .................................................. 193 f. Defendants' Allegiance, Bases of Operations, and Other Contacts with the United States ........................................... 194 g. Domicile or Allegiance of the Injured Seaman ..................... 195 h. Summary and Conclusion ........................................... 197 IV. The Molding of the Verdict ................................................ 198 A. Waiver of Comparative Causation on the Unseaworthiness Claim ........... 199 B. Lack of Authority to Mold the Verdict .................................. 201 C. Joint and Several Liability ............................................ 203 V. Conclusion ................................................................ 204

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Argued Aug. 8, 1994

Before: MANSMANN, COWEN, and McKEE, Circuit Judges.

Reargued En Banc Feb. 7, 1995

Before: SLOVITER, Chief Judge, BECKER, STAPLETON, MANSMANN, GREENBERG, HUTCHINSON, SCIRICA, COWEN, NYGAARD, ALITO, ROTH, LEWIS, McKEE, and SAROKIN, Circuit Judges.

OPINION OF THE COURT

BECKER, Circuit Judge.

INTRODUCTION

Plaintiff Eileen Anne Neely, a young American employed at a Club Med resort in St. Lucia, was seriously injured when she was sucked into the propellers of a scuba diving vessel, the Long John. Plaintiff was a member of the crew of the vessel, which was in St. Lucian coastal waters at the time of the accident. She brought suit in the District Court for the Eastern District of Pennsylvania, and a jury there, responding to special interrogatories, found her employers negligent and the vessel unseaworthy, and awarded plaintiff a large verdict on her Jones Act, general maritime law, and maintenance and cure claims. Molding the verdict in response to post-trial motions, the court modified and substantially reduced the verdict by applying to the unseaworthiness claim the percentage of contributory negligence found by the jury with respect to the Jones Act claims. Then, on cross-appeals, a panel of this court, invoking Lauritzen v. Larsen, 345 U.S. 571, 73 S.Ct. 921, 97 L.Ed. 1254 (1953), vacated the entire judgment for the plaintiff on the ground that the district court had lacked subject matter jurisdiction over the action. We granted rehearing in banc and vacated the panel opinion and judgment.

While the appeals present a large number of questions, we address only the subject matter jurisdiction, choice of law, and verdict molding issues. 1 With respect to subject matter jurisdiction, we conclude that the multi-factored analysis established by Lauritzen, Romero v. International Terminal Operating Co., 358 U.S. 354, 79 S.Ct. 468, 3 L.Ed.2d 368 (1959), and Hellenic Lines Ltd. v. Rhoditis, 398 U.S. 306, 90 S.Ct. 1731, 26 L.Ed.2d 252 (1970) (together, the "Lauritzen triad"), governs choice of law, not subject matter jurisdiction, in Jones Act and American general maritime law claims. Then, applying the usual analyses for federal question and admiralty jurisdiction, we conclude that the district court had subject matter jurisdiction over this suit.

Turning our attention to the multi-factored "substantial contacts" test of the Lauritzen triad, we adopt a two-stage interpretation of

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that test, subjecting the Lauritzen factors to a relatively simple sufficiency test followed by a more involved reasonableness inquiry. We first find American maritime law potentially applicable in this case because the plaintiff is an American citizen. Accordingly, we consider whether applying American law is reasonable under the circumstances. Because the defendants did not inform the district court of the content of St. Lucian law, any interests St. Lucia might have in this case are undefined and, consequently, do little to render application of American law unreasonable. Additionally, in considering the significance of the various Lauritzen factors, we pay heed to the non-traditional context of this suit. By this we do not mean that the vessel involved here was unlike those in traditional, international shipping cases; rather, the activity here was non-traditional, for the Long John did not take its crew from sea to sea in pursuit of international commerce but rather only from beach to reef in aid of scuba diving adventures.

The accident occurred in St. Lucian waters, which as we explain is an important consideration in non-shipping contexts. And one of the defendants is a corporation organized under the laws of St. Lucia, a factor that also reflects some interest on the part of St. Lucia in applying its law. But these factors do not mean that American law may not be reasonably applied under the circumstances. Even when we add to these some evidence that the Long John, the vessel that injured plaintiff, was registered in St. Lucia, we cannot conclude that St. Lucia's interests, whatever they may be, are so threatened or so strong that America's interests must be ignored.

As our opinion explains, the United States has an overriding interest in assuring adequate compensation for its injured seamen. In the non-shipping context of this case, the significance of plaintiff's American allegiance is an especially important factor, and the relevance of the plaintiff's having entered into her employment contract in the United States is also enhanced. Conversely, the law of the flag of the Long John is of diminished importance in the non-traditional context, and, at all events, the law of the flag would be entitled to virtually no significance here both because there was no evidence that the Long John actually flew the flag of St. Lucia (or any other nation) and because the district court was presented with no information as to the content of St. Lucian law.

Additionally, two of the defendants are American corporations, the Long John was built in America to American specifications, and the St. Lucian defendant, whose operations are in large measure run by one of its affiliated American co-defendants, derives the majority of its income from American tourists booked by another affiliated American co-defendant. Because the connections between this incident and the United States implicate significant American interests, and because consideration of all the circumstances confirms the reasonableness of applying United States law, we conclude that the contacts with the United States are "substantial," and American laws, both the Jones Act and our general maritime law, apply to this suit.

We also conclude that the district court erred in molding the verdict to apply the percentage of comparative negligence found by the jury with respect to the Jones Act claim to the unseaworthiness claim. We so hold because the defendants waived the issue, and because the court, which did not submit it to the jury, lacked authority to later make the omitted factual determinations sua sponte. We will therefore affirm the order of the district court holding two of the defendants liable under American law, but will vacate the district court's order of January 26, 1993, and direct it, on remand, to enter judgment for the...

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