Dracos v. Hellenic Lines, Ltd.

• Decision Date: 09 May 1985
• Docket Number: No. 81-1870,81-1870
• Parties: , 53 USLW 2574 Maria DRACOS, as Administratrix of the Estate of Nicholas Dracos, deceased, Appellant, v. HELLENIC LINES, LIMITED, a corporation, Appellee.
• Court: U.S. Court of Appeals — Fourth Circuit

Page 348

762 F.2d 348

1986 A.M.C. 721, 53 USLW 2574

Maria DRACOS, as Administratrix of the Estate of Nicholas

Dracos, deceased, Appellant, v. HELLENIC LINES, LIMITED, a corporation, Appellee.

No. 81-1870.

United States Court of Appeals,

Fourth Circuit.

Argued Dec. 5, 1983.

Decided May 9, 1985.

Avram G. Adler, Philadelphia, Pa. (Anne E. Fialkowski, Adler, Barish, Levin & Creskoff, Philadelphia, Pa., C. Arthur Rutter, Jr., John H. Klein, Breit, Rutter & Montagna, Norfolk, Va., on brief), for appellant.

Carter B.S. Furr, W.L. Berkley, III, Norfolk, Va. (Jett, Agelasto, Berkley, Furr & Price, Norfolk, Va., on brief), for appellee.

ON PETITION FOR REHEARING EN BANC.

Following reargument en banc, and prior to our decision, Hellenic Lines filed a bankruptcy proceeding in the United States Bankruptcy Court for the Southern District of New York, Case No. 83-B11776. As a result of the bankruptcy proceeding, the case before us became subject to the automatic stay provisions of the Bankruptcy Code, which was lifted by an order of that Bankruptcy Court October 1, 1984.

Before WINTER, Chief Judge, and RUSSELL, WIDENER, HALL, PHILLIPS, MURNAGHAN, SPROUSE, ERVIN and CHAPMAN, Circuit Judges.

WIDENER, Circuit Judge.

This appeal presents to us the principal issue of what, if any, collateral estoppel effect facts previously found which underlie the choice of law in a maritime tort action should have in resolving a similar choice of law issue in a later action. Also involved is whether there are sufficient American contacts to require a choice of the law of the United States. The district court refused to give collateral estoppel effect to prior cases and concluded that the law of the United States did not apply. On the basis of this choice of law, the district court further concluded that it lacked subject-matter jurisdiction and granted the defendant's motion for judgment notwithstanding the verdict. We affirm.

I.

Nicholas Dracos was the chief engineer aboard the M/V HELLENIC STAR. He was last seen alive on May 14, 1977, when the ship was berthed in Norfolk, Virginia. Later that day, members of the crew found Dracos dead in the ship's refrigerator hold.

Maria Dracos, the widow of Nicholas Dracos and the administratrix of his estate, filed suit on account of the death of her husband against Hellenic Lines, Ltd., which was his employer and the ship's owner. The complaint asserted causes of action for damages on account of negligence under the Jones Act, 46 U.S.C. Sec. 688, and for unseaworthiness under the general "American Maritime Law," apparently as a pendent claim. See Romero, infra, 358 U.S. p. 380, 79 S.Ct. p. 484.

Throughout the course of this action, the defendant contested the district court's jurisdiction on the ground that the law of the United States did not apply. The defendant raised the issue of the applicability of foreign law in its answer and reiterated its position in its pretrial statement of issues and in various motions. Because it believed that Greek law determined the rights and liabilities of the parties, the defendant also asserted that the plaintiff's causes of action did not arise under the laws of the United States and thus the plaintiff had failed to state a jurisdictional basis for her suit. After the jury returned a plaintiff's verdict, the defendant moved for judgment n.o.v. Upon considering this motion, the district court concluded that neither federal law nor general maritime law of the United States applied in this case. The district court thus found itself to be without jurisdiction and entered judgment for the defendant. ¹

II.

Federal courts are courts of limited jurisdiction; their jurisdiction will not be presumed. Lehigh Mining & Manufacturing Co. v. Kelly, 160 U.S. 327, 337, 16 S.Ct. 307, 311, 40 L.Ed. 444 (1895). Accordingly, plaintiffs must affirmatively plead the jurisdiction of the federal court. FRCP 8(a)(1); McNutt v. General Motors Acceptance Corp., 298 U.S. 178, 189, 56 S.Ct. 780, 785, 80 L.Ed. 1135 (1936). Of course a federal court has jurisdiction to inquire into its own jurisdiction, Romero v. International Terminal Co., 358 U.S. 354, 359, 79 S.Ct. 468, 473, 3 L.Ed.2d 368 (1959), and the district court did just that in the case at hand.

The plaintiff concedes, as she must, that she had the burden of showing such facts that would lead the court to choose American law. Therefore, the plaintiff's burden of proving jurisdiction was principally a burden to show that the court must choose American law, for on its choice of law its jurisdiction depended.

In Lauritzen v. Larsen, 345 U.S. 571, 583-90, 73 S.Ct. 921, 928-32, 97 L.Ed. 1254 (1953), the Supreme Court enumerated seven factors to be considered in choosing the proper choice of law to govern a maritime tort: (1) the place of the wrongful act, (2) the law of the flag, (3) the allegiance or domicile of the injured seaman, (4) the allegiance of the defendant shipowner, (5) the place of the execution of the employment contract, (6) the inaccessibility of the foreign forum, and (7) the law of the forum. The Court explained that like factors guide choices of law in light of the interests of the governments and national interest involved. Id. at 582, 73 S.Ct. at 928. They also determine the applicability of both the Jones Act and general maritime law. Romero, supra, 358 U.S. at 382, 79 S.Ct. at 485. The Supreme Court has also said that these seven factors are not exhaustive and that they should not be applied mechanically. Hellenic Lines, Ltd. v. Rhoditis, 398 U.S. 306, 308-09, 90 S.Ct. 1731, 1733-34, 26 L.Ed.2d 252 (1970). The Rhoditis Court added other factors to be considered in choosing the proper law. The presence of the foreign shipowner's base of operations within the United States was an important factor in making the Jones Act apply to a foreign seaman's tort claim. 398 U.S. at 309, 90 S.Ct. at 1734. Additionally, it was held that the substantial and continuing American contacts of Hellenic Lines had to be considered. 398 U.S. at 310, 90 S.Ct. at 1734.

The district court in the case before us carefully considered these factors. The defendant shipowner and employer was a Greek corporation. Its vessels flew the Greek flag and were registered under Greek law. Both the plaintiff and her husband were Greek citizens and domiciliaries. The contract of employment between Nicholas Dracos and the defendant was drafted and executed in Greece as a collective bargaining agreement of the Panhellenic Seaman's Federation. The contract made Greek law in Greek courts control the rights and liabilities arising from the employment relationship. Maria Dracos had remedies available in a Greek court had she chosen to seek them.

The district court found that only two of the Lauritzen factors pointed to the selection of American law. Nicholas Dracos died while the M/V HELLENIC STAR was berthed in Norfolk, and his widow sued in the United States District Court for the Eastern District of Virginia. As the district court correctly noted, these two factors are relatively unimportant in a maritime context. Because a ship may travel through waters governed by various nations, the test of lex loci delicti would introduce an untoward uncertainty in which standards apply. Romero, supra, 358 U.S. at 384, 79 S.Ct. at 486; Lauritzen, supra, 345 U.S. at 583, 73 S.Ct. at 928. The nature of maritime commerce is such that a vessel will inevitably have contacts with many different nations. If the courts of each nation with substantial contacts applied their own law, the overlapping duties imposed on shipowners would blight maritime shipping. Lauritzen at 581, 73 S.Ct. at 927. And as is often the case with maritime torts, the place of the wrong in this case was fortuitous. Romero 358 U.S. at 384, 79 S.Ct. at 486.

The filing of suit in federal court is also immaterial unless this country has a significant interest in having its law applied. See Lauritzen, supra, 345 U.S. at 590-91, 73 S.Ct. at 932. An American interest can be most readily made out when the two most important Lauritzen factors, the ship's flag and the shipowner's allegiance, point to this country. Lauritzen, supra, at 584-87, 73 S.Ct. at 929-30. And in Rhoditis the Supreme Court decided that an analysis should take into account substantial and continuing American contacts. Rhoditis held that when the shipowner, although a foreign corporation, had its base of operations in the United States and had substantial and continuing contacts with this country, then American law applied in a maritime tort action. Rhoditis, supra, 398 U.S. at 310, 90 S.Ct. at 1734.

In concluding that American law did not apply in this action against the same party defendant sued in Rhoditis, the district court examined the evidence of the defendant's operations and contacts with the United States. The court found the evidence insufficient to show an American base of operations or substantial enough American contacts to require an application of either the Jones Act or general American maritime law. These findings are factual and are not clearly erroneous. FRCP 52(a). It also concluded that earlier cases in which federal courts determined that American law applied in cases involving Hellenic Lines had no collateral estoppel effect.

III.

In the district court, the plaintiff relied on a number of cases, in which Hellenic Lines had been involved in the federal courts, to support its theory of offensive collateral estoppel. On appeal it does not rely on any of them except Rhoditis, which we will discuss later, and Vassalos v. Hellenic Lines, 482 F.Supp. 906 (E.D.Pa.1979). Vassalos does not serve as an estoppel because there was no choice of law question decided in that case.

In Rhoditis the Supreme Court held that the defendant was subject to American law based on a finding that the shipowner had its base of operations in the United States and had substantial and continuing American contacts. Those findings,...