American Home Assur. v. Tgl Container Lines
| Decision Date | 07 December 2004 |
| Docket Number | No. C 03-5190MHP.,C 03-5190MHP. |
| Parties | AMERICAN HOME ASSURANCE COMPANY; AIU Company, Plaintiffs, v. TGL CONTAINER LINES, LTD.; Trans Global Logistics(S) Pte Ltd.; Hanjin Shipping Company Ltd.; M/V Hanjin Pennsylvania, Defendants. TGL Container Lines, Ltd.; Trans Global Logistics(S) Pte Ltd., Third-Party Plaintiffs, v. The Hanjin Pennsylvania; Hanjin Shipping Company Ltd., Third-Party Defendants. |
| Court | U.S. District Court — Northern District of California |
Marilyn Raia, Bullivant Houser Bailey PC, San Francisco, CA, for Plaintiffs.
Gary Edward Davidson, Rasco Reininger Perez & Esquenazi, Coral Gables, FL, Ronald Edward Mallen, Cassidy E. Chivers, Hinshaw & Culbertson, San Francisco, CA, for plaintiffs and Defendants.
Michael Lee Swain, Swain & Dipolito, Long Beach, CA, for Defendants.
MEMORANDUM AND ORDER Re: Hanjin's Motion to Dismiss Third-Party Complaint; Trans Global's Motion for Summary Judgment; Trans Global's Motion for Leave to Amend Answer and Third-Party Complaint
Plaintiffs American Home Assurance Co. and AIU Co. filed this action in admiralty seeking to recover damages allegedly caused by a fire aboard the vessel M/V Hanjin Pennsylvania ("the Pennsylvania"). Defendants TGL Container Lines, Ltd. ("TGL") and Trans Global Logistics(s) Pte Ltd. ("TGX") (collectively "Trans Global") denied liability and filed a third-party complaint impleading the Pennsylvania and Hanjin Shipping Co. ("Hanjin"). Now before the court is Hanjin's motion to dismiss Trans Global's third-party complaint for improper venue pursuant to Federal Rule of Civil Procedure 12(b)(3). Having considered the arguments presented and for the reasons stated below, the court enters the following memorandum and order.
This action seeks to establish liability for the loss of goods at sea during a fire that occurred aboard the defendant vessel. Plaintiffs American Home Assurance Co. and AIU Co. are subrogated insurers of three shipments of goods that were aboard the Pennsylvania at the time that the fire broke out. Pls.' First Amended Compl. ¶ 8. Defendants and third-party plaintiffs TGL and TGX are non-vessel operating common carriers ("NVOCCs") who arranged for the transport of goods aboard the Pennsylvania on behalf of plaintiffs' subrogors or their agents. Defs.' Third-Party Compl. ¶ 7.1 Defendant and third-party defendant Hanjin is a South Korean Corporation that chartered the Pennsylvania for the purpose of shipping the allegedly damaged goods. See Zhi Decl., Exhs. A-C.
The events that gave rise to this action occurred in November 2002. At that time, Trans Global arranged with plaintiffs' subrogors to have three shipments of clothing transported from Shanghai, China to two destinations in Europe (Felixstowe, United Kingdom and Rotterdam, The Netherlands). Joint Statement of Undisputed Facts ¶ 2. While en route to Europe, a fire broke out aboard the Pennsylvania, allegedly damaging two shipments of men's shirts insured by plaintiffs. See Pls.' First Amended Compl. ¶¶ 7-9 & Schedule A; Joint Case Management Conference Statement, Attachment A at 1 (June 6, 2004).2 A third shipment was not damaged in the fire but was delivered subject to a lien for collectible salvage and general average expense. Joint Case Management Conference Statement, Attachment A at 1; Joint Statement of Undisputed Facts ¶ 4.
On November 21, 2003, plaintiffs filed this action in admiralty seeking damages against Trans Global. Plaintiffs also request declaratory judgment that they have no liability for general average contribution. To establish this court as a proper venue for their action, plaintiffs rely on the "Governing Law and Jurisdiction" clause in the bills of lading3 that Trans Global issued to their subrogors, which provides in relevant part that "any action or other dispute [under the bills of lading] shall be brought before the California Courts unless the Carrier otherwise agrees in writing." Resp. to Pls.' Req. for Judicial Notice, Exh. A ¶ 21(a).
On May 7, 2004, Trans Global answered plaintiffs' complaint and filed a third-party complaint against Haijan and the defendant vessel, seeking indemnity, contribution, and enforcement of a maritime lien. On August 26, 2004, Haijan filed a motion to dismiss all claims against it pursuant to the forum selection clause of the bills of lading issued to plaintiffs' subrogors. In the alternative, Hanjin sought dismissal of the complaint and third-party complaint on the ground of forum non conveniens. As an alternative forum for this action, Hanjin has identified the High Court of Justice, Queen's Bench Division of the Admiralty Court in London, England, a venue in which Hanjin is currently defending claims brought by at least seventeen cargo owners who represent approximately seventy percent of the known cargo damage that resulted from the fire aboard the Pennsylvania. Hoyes Decl. ¶¶ 2, 7 & Exh. C.
On September 2, 2004, this court issued an order granting Hanjin's motion to dismiss plaintiffs' complaint pursuant to a stipulation of the parties. Order Approving Stipulation of Dismissal at 1-2. However, Trans Global continues to oppose Hanjin's motion to dismiss its third-party complaint. In addition, on September 24, 2004, Trans Global filed a motion for summary judgment that plaintiffs are bound by the forum selection clause in Hanjin's bills of lading, thereby requiring the court to dismiss all claims in this action for improper venue. Plaintiffs oppose this motion, arguing, inter alia, that Trans Global waived its right to object to improper venue by failing to raise the issue in its motion to dismiss filed on March 15, 2004 and by failing to plead improper venue as an affirmative defense in answering plaintiffs' complaint. See Fed. R. Civ. Pro. 12(h). In response, Trans Global moved for leave to amend its answer and third-party complaint for the purpose of asserting defenses based on improper venue, forum non conveniens, impossibility of performance, and the fire exemption provision of the Carriage of Goods at Sea Act ("COGSA"), 46 U.S.C. app. § 1304(2)(b). This court consolidated proceedings on all pending motions and heard arguments from the parties on November 15, 2004. This order addresses the issues raised by the parties in their briefs and at the November 15 hearing.
A motion to enforce a forum selection clause is treated as a motion to dismiss for improper venue pursuant to Federal Rule of Civil Procedure 12(b)(3). Kukje Hwajae Ins. Co., Ltd. v. M/V Hyundai Liberty, 294 F.3d 1171, 1174 (9th Cir.2002), vacated on other grounds, ___ U.S. ___, 125 S.Ct. 494, ___ L.Ed.2d ___ (2004). Consequently, the pleadings need not be accepted as true, and facts outside the pleadings properly may be considered. Id. Nonetheless, the trial court must draw all reasonable inferences and resolve all factual conflicts in favor of the non-moving party. Murphy v. Schneider Nat'l, Inc. 362 F.3d 1133, 1138 (9th Cir.2004). The enforceability of the forum selection clause is determined according to federal law. Argueta v. Banco Mexicano, S.A., 87 F.3d 320, 324 (9th Cir.1996).
Under the "prevailing rule" established by the Supreme Court in The Bremen v. Zapata Off-Shore Co., 407 U.S. 1, 92 S.Ct. 1907, 32 L.Ed.2d 513 (1972), a forum selection clause is presumptively valid if "venue is specified with mandatory language." Docksider, Ltd., v. Sea Tech., Ltd., 875 F.2d 762, 764 (9th Cir.1989). To overcome such mandatory language, the party seeking to avoid the chosen venue must demonstrate that requiring litigation in the selected forum or fora would be "`unreasonable' under the circumstances." Fireman's Fund Ins. Co. v. M.V. DSR Atl., 131 F.3d 1336, 1338 (9th Cir.1997) (quoting M/S Bremen v. Zapata Off-Shore Co., 407 U.S. 1, 10, 92 S.Ct. 1907, 32 L.Ed.2d 513 (1972)), cert. denied, 525 U.S. 921, 119 S.Ct. 275, 142 L.Ed.2d 227 (1998). Absent a strong showing to that effect, the clause will deprive courts in other jurisdictions of venue over both in personam and in rem claims that fall within its scope. See id. In contrast, "[w]hen only jurisdiction is specified[,] the clause will generally not be enforced without some further language indicating the parties' intent to make jurisdiction exclusive." Docksider, 875 F.2d at 764.
Under the doctrine of forum non conveniens, a district court has discretion to dismiss an action, even if jurisdiction and venue are properly established, when (1) a foreign country also has jurisdiction to hear the case; and (2) either trial in the chosen American forum would establish oppressiveness and vexation to a defendant out of all proportion to the plaintiff's convenience, or the chosen American forum is inappropriate because of considerations affecting the court's own administrative and legal problems. American Dredging Co. v. Miller, 510 U.S. 443, 447-49 & n. 2, 114 S.Ct. 981, 127 L.Ed.2d 285, (1994); see also Piper Aircraft v. Reyno, 454 U.S. 235, 241, 102 S.Ct. 252, 70 L.Ed.2d 419 (1981). At the outset of any forum non conveniens inquiry, the court must determine whether an alternative forum exists. Piper Aircraft, 454 U.S. at 254 n. 22, 102 S.Ct. 252; Lueck v. Sundstrand Corp., 236 F.3d 1137, 1143 (9th Cir.2001). Ordinarily, this requirement will be satisfied when the defendant is amenable to process in the foreign jurisdiction. Piper Aircraft, 454 U.S. at 254 n. 22, 102 S.Ct. 252. However, "where the remedy offered by the other forum is clearly unsatisfactory, the other forum may not be an adequate alternative, and the initial requirement may not be satisfied." Id.
If the court concludes that there is an adequate alternative forum to adjudicate the parties' dispute, it must then determine whether the balance of the "private interest" and "public interest" factors weighs in favor of...
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