Terry v. Raymond Intern., Inc.

• Decision Date: 08 October 1981
• Docket Number: No. 79-1227,79-1227
• Citation: 658 F.2d 398
• Parties: Fred P. TERRY, Plaintiff-Appellee Cross-Appellant, v. RAYMOND INTERNATIONAL, INC., Defendant-Appellee, v. MANITOWOC ENGINEERING COMPANY, Defendant-Appellant Cross-Appellee. . *
• Court: U.S. Court of Appeals — Fifth Circuit

Page 398

658 F.2d 398

Fred P. TERRY, Plaintiff-Appellee Cross-Appellant, v. RAYMOND INTERNATIONAL, INC., Defendant-Appellee, v. MANITOWOC ENGINEERING COMPANY, Defendant-Appellant Cross-Appellee.

No. 79-1227.

United States Court of Appeals, Fifth Circuit.

^*

Oct. 8, 1981.

Rehearing En Banc Denied Jan. 6, 1982.

Chester Francipane, Wayne H. Scheuermann, Metairie, La., for defendant-appellant cross-appellee.

Michael X. St. Martin, Danny J. Lirette, Houma, La., Robert M. Contois, Jr., Warren M. Schultz, Jr., New Orleans, La., for plaintiff-appellee cross-appellant.

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

Before GOLDBERG, CHARLES CLARK and REAVLEY, Circuit Judges.

CHARLES CLARK, Circuit Judge:

This case arises from injuries suffered by Fred. P. Terry during the installation of a crane on a petroleum production platform twenty-five miles off the coast of England. Manitowoc Engineering Company, the manufacturer of the crane, argues that the court below lacked personal jurisdiction over the company, that maritime law, not Louisiana law, should have determined the rights of the parties, and that the evidence did not support the jury's verdict. Terry cross appeals, arguing that the court below should have awarded him interest as of the date of judicial demand, as required by Louisiana law. We hold that the district court had personal jurisdiction over Manitowoc, that the court correctly apportioned liability under Louisiana law, and that there was ample evidence to support the jury's verdict. We vacate the trial court's award of interest and hold that interest must be awarded as of the date of judicial demand.

I.

Terry was employed by Raymond International as a seaman aboard the SARITA, a workship servicing offshore platforms in the North Sea. Raymond, a "rigging" company with expertise in the construction of offshore platforms, was under contract with Phillips Petroleum Company to convert a Phillips drilling platform to a production platform. Terry and the SARITA were assigned to this project, which required, inter alia, the installation of two Manitowoc Seacrane 70 cranes. The cranes were purchased by Phillips from A. Long, a British company which dealt in Manitowoc products. Manitowoc sponsored training programs in which A. Long personnel were trained in the service and use of Manitowoc products. Jack Beirne, an A. Long employee who had attended such programs, was sent to the platform to supervise the erection of the cranes. When Beirne arrived on the platform, however, Raymond personnel already had set the cab of the crane on its pedestal. As a result, Beirne was faced with the problem of mounting a 13-ton counterweight on the cab of the crane while the cab was fixed some 20 feet above the deck of the platform.

Under a plan devised by Raymond personnel and known to Beirne, Raymond attempted to mount the counterweight by hoisting it on cables attached to an A-frame gantry which projected from the roof of the cab directly above the location of the counterweight. This method of mounting the counterweight was approved by Manitowoc for a land-based Manitowoc crane, but it was not approved for the Seacrane 70. Some ten minutes after the hoisting operation began, the A-frame gantry collapsed, crushing Terry.

Terry brought suit against Raymond and Manitowoc in the United States District Court for the Eastern District of Louisiana. The complaint alleged both diversity and admiralty jurisdiction. Manitowoc, a Wisconsin corporation with no agent for service of process in Louisiana, was served by letter to its Wisconsin headquarters. Raymond filed a third-party complaint against Manitowoc, arguing that Manitowoc was liable to Raymond for any sums owed by Raymond to Terry. Service then was made on Elmer Nagel, Manitowoc's sole employee in Louisiana. Nagel was a maintenance employee who serviced Manitowoc cranes used in the Louisiana area. Manitowoc made a timely objection to the personal jurisdiction of the court, but the district court denied the company's motion to dismiss.

The primary issue at trial was whether Raymond or Manitowoc was responsible for the accident. Raymond argued that the Seacrane 70 was defectively designed and that Manitowoc was negligent in failing to warn users that the A-frame gantry could not be used to mount the counterweight. Raymond's witnesses testified that erection of the crane presented an engineering problem with no satisfactory solution, and that minor design modifications would have enabled the gantry to support the counterweight. They also suggested that Manitowoc's training program for A. Long employees should have alerted the trainees to the danger of using the gantry to hoist the counterweight. According to Manitowoc, however, Raymond's misuse of the Seacrane 70 was the sole cause of the accident. Manitowoc argued that the gantry was not designed to support the counterweight, and that Raymond should have known that using the gantry as a purchase for hoisting the counterweight into place was unreasonably dangerous. A jury found that Raymond was sixty percent responsible for Terry's accident and that Manitowoc was forty percent responsible. It awarded Terry a total recovery of 1.5 million dollars. Raymond chose not to appeal and settled with Terry for 750,000 dollars.

II

Our analysis of personal jurisdiction is based on a combination of two elements, amenability to jurisdiction and service of process. By amenability we refer to the substantive reach of a forum's jurisdiction. Service of process is the physical means by which jurisdiction is asserted. These elements are related but distinct. Both service and amenability must be present to authorize a district court to adjudicate the rights of the parties. Because amenability has both a state law and federal constitutional significance, personal jurisdiction of the district court over Manitowoc must be determined by the use of three tests: (1) assertion of jurisdiction by the law of the forum, (2) conformity of the law with the Constitution, and (3) authority for the means of service of process. Under the Federal Rules of Civil Procedure, either federal or state methods of service are authorized. See Fed.R.Civ.P. 4. If the law of the forum does not authorize the means by which service on a party has been accomplished, the court lacks personal jurisdiction over the party even though the party is amenable to the court's jurisdiction.

In a diversity case, the amenability of a nonresident party is determined under a two-part test. First, the long arm statute of the forum state must assert jurisdiction over the defendant for the cause of action at issue in the suit. This question is governed by state law. This question is governed by state law. E.g., Standard Fittings Co. v. Sapag, S.A., 625 F.2d 630, 636 (5th Cir.1980); Jetco Electronic Industries, Inc. v. Gardiner, 473 F.2d 1228, 1232 (5th Cir.1973). Second, the exercise of personal jurisdiction over the defendant must be consistent with the due process clause of the fourteenth amendment. This inquiry proceeds under federal law, and consists of deciding whether the defendant has minimum 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. Washington, 326 U.S. 310, 316, 66 S.Ct. 154, 158, 90 L.Ed. 95, 101 (1945); see also Product Promotions, Inc. v. Cousteau, 459 F.2d 483, 489 (5th Cir.1974).

The contours of amenability in non-diversity cases are more fluid. Federal statutes have effect throughout the United States, and thus assertion of "federal long arm jurisdiction" arises only in the context of jurisdiction over nonresident aliens or the extraterritorial assertion of American law. Cf. Continental Ore Co. v. Union Carbide & Carbon Corp., 370 U.S. 690, 704-05, 82 S.Ct. 1404, 1413, 8 L.Ed.2d 777, 787 (1962); American Banana Co. v. United Fruit Co., 213 U.S. 347, 355-56, 29 S.Ct. 511, 512, 53 L.Ed. 826, 831-832 (1909). Some commentators have suggested that the due process clause of the fifth amendment imposes upon the personal jurisdiction of the federal courts restrictions similar to those imposed on state courts under the fourteenth amendment. See Foster, Long-Arm Jurisdiction in Federal Courts, 1969 Wis.L.Rev. 9, 36 (1969). As this court has observed, "[a]lthough the propriety of service issuing from a federal court need not necessarily be tested by the same yardstick as is the constitutional limitation upon service of process from a state court, the latter standard provides a helpful and often used guidelines." Time, Inc. v. Manning, 366 F.2d 690, 694 (5th Cir.1966). Strict federal venue requirements, however, have made it unnecessary to develop a judicial doctrine of the limits of personal jurisdiction in federal cases. Thus, as a practical matter, the most significant restraint on the personal jurisdiction of federal courts in federal cases is service of process, the third part of the three-part test.

It is settled that Congress may provide for nationwide service of process if it chooses to do so. See Robertson v. Railroad Labor Board, 268 U.S. 619, 622, 45 S.Ct. 621, 622, 69 L.Ed. 1119, 1121 (1925). In fact, Congress has permitted nationwide service in several specialized statutes. See, e.g., 28 U.S.C. Sec. 2361 (1978) (interpleader); 15 U.S.C. Secs. 5, 22, 25 (1973) (federal antitrust laws); 15 U.S.C. Sec. 77v(a) (1971) (federal securities laws). However, Congress has not authorized general process from the district courts to run throughout the nation. Under Rule 4, federal process can be served outside the state in which the district court sits only under an explicit provision in a federal statute, under state procedures, or under the provisions for 100-mile "bulge" service.

III.

Manitowoc argues that the federal district court in the Eastern District of Louisiana lacked personal jurisdiction over the...