Cuevas v. Reading & Bates Corp.

• Decision Date: 07 December 1983
• Docket Number: Civ. A. No. H-82-1388.
• Citation: 577 F. Supp. 462
• Parties: Rogelio J. CUEVAS, et al, Plaintiffs, v. READING & BATES CORPORATION, Reading and Bates, Inc., Reading & Bates Drilling Co., Reading & Bates Exploration Co. and the Ron Tappmeyer, Defendants.
• Court: U.S. District Court — Southern District of Texas

577 F. Supp. 462

Rogelio J. CUEVAS, et al, Plaintiffs, v. READING & BATES CORPORATION, Reading and Bates, Inc., Reading & Bates Drilling Co., Reading & Bates Exploration Co. and the Ron Tappmeyer, Defendants.

Civ. A. No. H-82-1388.

United States District Court, S.D. Texas, Houston Division.

December 7, 1983.

COPYRIGHT MATERIAL OMITTED

Orsburn & Browning, Charles F. Browning, Houston, Tex., Due Dodson, deGravelles, Robinson & Caskey, C. John Caskey, Baton Rouge, La., and Tan Sapalo, Manzano, Velez & Fernandez, Eugene A. Tan, Makato, Metro Manila, Phillipines, for plaintiffs.

Royston, Rayzor, Vickery & Williams, Ted Litton, Houston, Tex., for defendants.

MEMORANDUM AND ORDER

STERLING, District Judge.

Pending before the Court is Plaintiffs' motion to transfer and Defendants' motion to dismiss principally on grounds of forum non conveniens. This is a suit by several Philippines and representatives of several other deceased Philippine workers for damages resulting from alleged non-payment of wages, and injuries or death suffered as a result of inhalation of hydrogen sulfide gas on October 2, 1980. The gas emission occurred while the victims were serving on board Defendants' jack-up drilling rig, Ron Tappmeyer. At that time the vessel was drilling for oil and gas approximately 100 miles off the coast of Saudi Arabia. All Plaintiffs are domiciliaries and citizens of the Republic of the Philippines and apparently always have been so, as were the decedents. Defendants are The Ron Tappmeyer and corporations formed under the laws of the United States.

Plaintiffs' motion to transfer will be Denied. As will be developed below, this case is not governed by American law and because of the doctrine of forum non conveniens should not be brought in a court of the United States. Therefore, it would be improper to burden the United States Court for the Eastern District of Louisiana with this litigation.

In considering a motion to transfer or dismiss the Court accepts as true only the facts agreed upon by the parties and the allegations of the complaint and answer which have not been traversed by the language contained in opposing pleadings or arguments. See e.g., Gibbs v. Buck, 307 U.S. 66, 72, 59 S.Ct. 725, 729, 83 L.Ed. 1111 (1939). Broad, conclusory legal statements which conflict do not establish a question of fact unless the factual allegations underlying the conclusory statements are themselves in conflict. Id.

It has been suggested that the initial inquiry in determining a forum non conveniens issue is the choice of law to be applied. Fisher v. Agios Nicolaos V, 628 F.2d 308, 315 (5th Cir.1980), cert. denied sub nom. Valmas Brothers Shipping, S.A. v. Fisher, 454 U.S. 816, 102 S.Ct. 92, 70 L.Ed.2d 84 (1981). This Court adopts such an approach because if "the correct choice of law decision is to apply foreign law ... a district court's discretion in granting a forum non conveniens dismissal will not ordinarily be disturbed on review" but, on the other hand, "if United States law is applicable, the American court should retain jurisdiction." Id.

Choice of Law—Basic Analysis

In this case three nations, the Philippines, Saudi Arabia and the United States, have interests implicated by these claims. The question at hand is whether American or foreign law applies. Logic indicates that if the interests of either of the two foreign countries involved in this case substantially outweigh the interests of the United States, then foreign law applies. However, rather than compare the concerns of all three states, the Court will compare only the interests of the United States and the Philippines.

In three cases, Lauritzen v. Larsen, 345 U.S. 571, 73 S.Ct. 921, 97 L.Ed. 1254 (1953); Romero v. International Terminal Operating Co., 358 U.S. 354, 79 S.Ct. 468, 3 L.Ed.2d 769 (1959); Hellenic Lines Ltd. v. Rhoditis, 398 U.S. 306, 90 S.Ct. 1731, 26 L.Ed.2d 252 (1970), the Supreme Court has defined the controlling standard for determining the relative interests of various nations so that the proper law may be chosen by an American court. Analysis of these decisions reveals the following factors to be taken into account in making such choice:

1. Place of the Wrongful Act—Saudi Arabia.

2. Law of the Flag—United States.

3. Allegiance or Domicile of the Plaintiffs —Philippines.

4. Allegiance of the Defendant Shipowner —United States.

5. Place of Contract—Philippines.

6. Inaccessibility of Foreign Forum— this factor favors the Philippines.

7. The Law of the Forum—this factor is a mixed indicator of minimal importance.

8. Base of Operations—Saudi Arabia, Philippines, and United States.

The first factor is generally very important, cf. Restatement (Second) Conflict of Laws § 146, and indicates that foreign law (Saudi Arabia) should apply. The discount of this factor in Lauritzen v. Larsen, supra 345 U.S. at 583-84, 73 S.Ct. at 928-29, because that case involved a ship passing through many waters, is largely inapplicable to this case involving a stationary rig. See De Olivera v. Delta Marine Drilling Co., 684 F.2d 337, 340 (5th Cir.1982); Chiazor v. Transworld Drilling Co., 648 F.2d 1015, 1019 (5th Cir.1981), cert. denied 455 U.S. 1019, 102 S.Ct. 1714, 72 L.Ed.2d 136 (1982); Phillips v. Amoco Trinidad Oil Co., 632 F.2d 82, 87 (9th Cir.1980), cert. denied, 451 U.S. 920, 101 S.Ct. 1999, 68 L.Ed.2d 312 (1981). Inversely, because of the differences between a mobile and stationary vessel or rig the importance of the second factor is much less in this case than it was in Lauritzen. See De Olivera; Chiazor, and Phillips.

The third factor is one of major importance which has been progressively identified as being of greater relative significance in more recent legal analyses. Id. In Lauritzen,¹ the Supreme Court discussed the then recent abandonment of the legal fiction which had previously held that all crewmembers were presumed to have the nationality of their vessel's flag. The Court noted that "each nation has a legitimate interest that its permanent inhabitants be not maimed or disabled from self-support." Id. This interest cannot be minimized, and will be discussed in greater detail below. In this case it is uncontradicted that the Plaintiffs are past and present Philippine domiciles and citizens who were hired by Defendants in the Philippines and whose contracts called for their return to the Philippines at the end of every employment period.

The fourth factor is also significant and, conversely, points to the United States. The relative importance of this consideration will be compared below to the importance of the third consideration.

The fifth factor points to the application of Philippine law. It is uncontradicted that Plaintiffs were hired in the Philippines and signed contracts which made the law of their country applicable. This is strong evidence of the expectations of the parties concerning the law under which they were to be governed. The expectation interest is a reason to emphasize this choice of law factor. The facts justifying criticism of the fifth factor discussed in Lauritzen are missing here since no party has attacked the validity of the contract. The place of signing was not fortuitous in this case. The Plaintiffs are permanent residents of the Philippines, the rig in question has only operated in two places throughout the entire course of its existence (the Philippines and Saudi Arabia), and by the terms of the employment contracts the Plaintiffs returned to their homeland periodically for approximately two-month periods. See Chiazor v. Transworld Drilling Co., supra at 1019; Zekic v. Reading & Bates Drilling Co., 536 F.Supp. 23, 25 (E.D.La. 1981) aff'd 680 F.2d 1107 (5th Cir.1982) (both cases emphasizing the place of contract interest).

The sixth consideration also counsels adoption of Philippine law. By appropriate conditions this Court will insure that Defendants submit themselves fully to the jurisdiction of the appropriate foreign sovereign. The Philippine courts are substantially more accessible to these Plaintiffs than are the courts of this nation. This fact has been strikingly illustrated in the present litigation by the apparent inability of attorney for Plaintiffs to communicate effectively with his clients during the many succeeding months which have elapsed since Plaintiffs first requested this Court to defer consideration of the wage claims alleged by them in their original complaint. See Plaintiffs' Memorandum In Opposition to Motion to Dismiss at 8 (filed Nov. 8, 1982).

The seventh and eighth considerations will be discussed together because they are largely related sides of the same issue. Under Lauritzen,² the first side of the question is whether the total contacts of the parties with the United States justify the imposition of American law. Rhoditis frames the same basic question as whether the Defendant and the incident are so related to American "operations" that the "national interest" of the United States require the application of its law.

In the case at bar, "although profits wind their way back to the United States, all the significant contacts center on ... the Far East." De Olivera v. Delta Marine Drilling Co., supra at 340. Uncontroverted evidence establishes that "day-to-day operating activities" were conducted and directed from the Defendants' office in Saudi Arabia. Reading and Bates, Inc.— Saudi Arabia Branch (RBISAB), registered with the government of Saudi Arabia several years ago and has operated the Ron Tappmeyer off the coast of Saudi Arabia continuously since the spring of 1980. The rig itself was constructed in Singapore and has been operated only in the Philippines and Saudi Arabia. RBISAB hired its employees in the Philippines and transported them on a regular basis to and from that nation and Saudi Arabia. Clearly, factors seven and eight do not command the selection of American law.

In summary three factors point to the application of Philippine law, two favor...