Bass v. Energy Transp. Corp.

• Decision Date: 24 March 1992
• Docket Number: Civ. No. K-91-1283.
• Citation: 787 F. Supp. 530
• Parties: Jerome W. BASS v. ENERGY TRANSPORTATION CORPORATION.
• Court: U.S. District Court — District of Maryland

787 F. Supp. 530

Jerome W. BASS v. ENERGY TRANSPORTATION CORPORATION.

Civ. No. K-91-1283.

United States District Court, D. Maryland.

March 24, 1992.

Paul D. Bekman and Israelson, Salsbury, Clements & Bekman, Baltimore, Md., for plaintiff.

Douglas D. Connah, Jr., Cathy A. Chester and Venable, Baetjer & Howard, Baltimore, Md., for defendant.

FRANK A. KAUFMAN, Senior District Judge.

On May 9, 1991, Bass instituted this suit against Energy Transportation Corporation (ETC)¹ under the Jones Act, 46 U.S.C.App. 688 (1988) and under general admiralty law for injuries which Bass sustained on board one of ETC's vessels, the S.S. LNG Aquarius, while employed by ETC as an unlicensed seaman. Plaintiff alleges that on February 11, 1989, when the S.S. LNG Aquarius was off the coast of Japan, he fell on his back while climbing down towards the deck, because the valve hand-wheel which he was gripping suddenly and unexpectedly came loose from the valve bonnet. Plaintiff claims that the sole cause of his accident was ETC's negligence and failure to provide a safe and seaworthy vessel for its employees. ETC, responding to plaintiff's complaint, seeks dismissal because of lack of personal jurisdiction and/or of service, or alternatively, transfer pursuant to 28 U.S.C. § 1406(a) to the United States District Court for the Southern District of New York. Subsequently, the parties agreed that limited discovery concerning the issue of personal jurisdiction would be conducted, and that plaintiff's service of its within complaint upon ETC's resident agent in Delaware constituted appropriate and sufficient service. Accordingly, the sole issue now pending in this case is whether this Court has personal jurisdiction over ETC.² "When a court's personal jurisdiction is properly challenged by a Rule 12(b)(2) motion, the jurisdictional question thus raised is one for the judge, with the burden on the plaintiff ultimately to prove the existence of a ground for jurisdiction by a preponderance of the evidence." Combs v. Bakker, 886 F.2d 673, 676 (4th Cir.1989) (citations omitted). See also McNutt v. General Motors Acceptance Corp., 298 U.S. 178, 189, 56 S.Ct. 780, 785, 80 L.Ed. 1135 (1936).

FACTS³

ETC, a closely held corporation with no resident Maryland shareholders, is in the business of shipping liquid natural gas between Indonesia and Japan. ETC's vessels do not travel, and never have traveled, to or from the State of Maryland. Nor has ETC ever had any offices, sales representatives, employees or agents located in Maryland. ETC is not registered or qualified to do business in Maryland, does not operate or manage any ships in Maryland, and has no real or personal property, telephone listings, or bank accounts in Maryland. ETC has never filed suit in, or been held subject to the jurisdiction of, any state or federal court located in Maryland, has never authorized an agent to accept service of process in Maryland, and has never paid taxes to the State of Maryland. ETC has never solicited any, or advertised its, shipping business in Maryland. ETC hires all of its licensed marine personnel through the Marine Engineers' Benefit Association (MEBA), headquartered in Jersey City, New Jersey, either by reviewing resumes placed on file in ETC's New York office or by contacting the MEBA office in New Jersey.

ETC's only contact with Maryland is through its collective bargaining agreement and its fifteen-year ongoing relationship with the Seafarer's International Union (SIU), which maintains its principal office in Camp Springs, Maryland, and its "manpower pool" and training center at Piney Point, Maryland. ETC first entered into a collective bargaining agreement with SIU in 1976 or 1977. Although apparently not bound in each and every circumstance to hire all of its unlicensed personnel⁴ pursuant to that agreement, ETC recognized SIU in that agreement as the "sole and exclusive bargaining representative of all Unlicensed Personnel employed on board and sic all American flag vessels now owned or operated by ETC."⁵ Moreover, since 1977 ETC has in fact hired all of its unlicensed seamen through SIU. In turn, SIU under the agreement agreed to fill all of ETC's hiring needs.⁶ The collective bargaining agreement is quite extensive and sets forth details of ETC's employment relationship with its unlicensed seamen, including selection of personnel, wages, hours, medical benefits, working conditions, job descriptions and grievance procedures.

Typically in ETC's hiring process of unlicensed personnel, the ETC marine personnel office telephones to the SIU manpower pool in Piney Point, Maryland, at the beginning of each month and states ETC's anticipated needs for unlicensed crew for the next month.⁷ The SIU manpower pool then recruits SIU seamen from all over the United States to fill ETC's hiring needs.⁸ Within a week, the SIU manpower pool calls the ETC marine personnel office in New York with the names of seamen who will fill ETC's crew needs for the next month.⁹ ETC forwards the identities of the seamen to its travel agent in New York City, which contacts the seamen directly to arrange for their transportation to Japan.¹⁰ Pursuant to that hiring procedure, plaintiff Bass was dispatched from the SIU hiring hall in Norfolk, Virginia and was flown from Raleigh, North Carolina to Japan to board the LNG Aquarius.¹¹

Since 1977 until the present, the ETC-SIU agreement has been renegotiated and renewed every three years.¹² The negotiations for the agreements in 1984, 1987, and 1990 took place at Camp Springs, Maryland, or Piney Point, Maryland.¹³ ETC and SIU spent a couple of months negotiating each new agreement.¹⁴ Those negotiations entailed regular phone calls, letter exchanges and several personal visits by ETC personnel to Maryland.¹⁵

The SIU not only provides unlicensed personnel for ETC, but also trains such personnel at Piney Point, Maryland.¹⁶ After the training course is complete, each student seaman receives a certificate in the form of a seaman's card.¹⁷ Although not all of the seamen hired by ETC through SIU are trained in Maryland, a substantial number of them do receive certification from Piney Point.¹⁸

Furthermore, ETC employees have visited the training center at Piney Point, Maryland to attend graduation ceremonies, to dedicate buildings for the training program, and to make monetary contributions.¹⁹ Three or four times a year, ETC employees travel to Maryland to observe the training program and to suggest changes which would benefit ETC as opposed to other companies which hire seamen from SIU.²⁰

SUBJECT MATTER JURISDICTION AND VENUE²¹

Federal question subject matter jurisdiction is present in this Jones Act case, pursuant to 28 U.S.C. § 1331 (1988), and also under the Jones Act, 46 U.S.C.App. § 688 (1988), which provides in pertinent part:

(a) Application of railway employee statutes; jurisdiction

Any seaman who shall suffer personal injury in the course of his employment may, at his election, maintain an action for damages at law, with the right of trial by jury, and in such action all statutes of the United States modifying or extending the common-law right or remedy in cases of personal injury to railway employees shall apply; ... Jurisdiction in such actions shall be under the court of the district in which the defendant employer resides or in which his principal office is located.

In Pure Oil Co. v. Suarez, 384 U.S. 202, 203-04, 86 S.Ct. 1394, 1395-96, 16 L.Ed.2d 474 (1966), the Supreme Court stated that although the last sentence of 46 U.S.C.App. § 688(a) "is framed in jurisdictional terms, ... it refers only to venue," and that while "corporate residence traditionally meant place of incorporation," the term "residence" as used in the statute is to be construed in accordance with "the expanded general venue statute, 28 U.S.C. § 1391(c) (1964 ed.)." In so concluding, Justice Harlan wrote:

Although there is no elucidation from statutory history as to the intended effect of § 1391(c) on special venue provisions, the liberalizing purpose underlying its enactment and the generality of its language support the view that it applies to all venue statutes using residence as a criterion, at least in the absence of contrary restrictive indications in any such statute.... There is nothing in the legislative history of this provision of the Jones Act to indicate that its framers meant to use "residence" as anything more than a referent to more general doctrines of venue rules, which might alter in the future.

Id. at 205, 86 S.Ct. at 1396 (footnotes omitted). See 15 Charles A. Wright, Arthur R. Miller & Edward H. Cooper, Fed.Prac. and Proc. § 3818, at 173 (2d ed. 1986). As amended, § 1391(c) now reads in pertinent part:

(c) For purposes of venue under this chapter, a defendant that is a corporation shall be deemed to reside in any judicial district in which it is subject to personal jurisdiction at the time the action is commenced.

(emphasis added).

For the reasons which are discussed supra, section 1391(c), as amended in 1988 prior to that 1989 accident alleged by Bass in this case, is deemed applicable herein. In sum, if personal jurisdiction exists in this case, venue exists. Also, as stated above, subject matter jurisdiction is present.

PERSONAL JURISDICTION

The Jones Act does not contain a service of process provision. Accordingly, personal jurisdiction over a defendant in a federal question case under the Jones Act depends on the applicability of a state's long arm statute. FED.R.CIV.P. 4. See Federal Insurance Co. v. Lake Shore, Inc., 886 F.2d 654, 657 n. 2 (4th Cir.1989). See also 4A Charles A. Wright & Arthur R. Miller, Fed.Prac. and Proc. § 1115, at 244-45, § 1075, at 495 (2d ed. 1987). In order for this Court to exercise personal jurisdiction over defendant, Maryland's long-arm statute must authorize and due process protections of the United States Constitution²² must permit the exercise of that jurisdiction. Although...