Bobolakis v. Compania Panamena Maritima San Gerassimo

• Decision Date: 26 November 1958
• Citation: 168 F. Supp. 236
• Parties: Ioannis BOBOLAKIS, Plaintiff, v. COMPANIA PANAMENA MARITIMA SAN GERASSIMO, S.A., and Transmar Agencies, Inc., Defendants.
• Court: U.S. District Court — Southern District of New York

168 F. Supp. 236

Ioannis BOBOLAKIS, Plaintiff, v. COMPANIA PANAMENA MARITIMA SAN GERASSIMO, S.A., and Transmar Agencies, Inc., Defendants.

United States District Court S. D. New York.

November 18, 1958.

Request for Certification Denied November 26, 1958.

Lebovici & Safir, New York City, for plaintiff, Herbert Lebovici, of counsel.

Dawson & Waaland, New York City, for defendant, Compania Panamena Maritima San Gerassimo, S. A., David P. Dawson, Thorolv T. Waaland, New York City, of counsel.

IRVING R. KAUFMAN, District Judge.

Defendant Compania Panamena Maritima San Gerassimo, S. A. (hereinafter Compania) moves pursuant to Rule 12 (b) (1) Fed.R.Civ.P. 28 U.S.C.A. for an order dismissing the complaint for lack of jurisdiction over the subject matter insofar as the complaint states a claim under the Jones Act, 46 U.S.C.A. § 688. By this same motion, defendant Compania also asks that the court in its discretion decline to take jurisdiction insofar as the complaint alleges a claim under the General Maritime Law.

Plaintiff, a seaman, brought this action at law under the Jones Act and the General Maritime Law, to recover for injuries he allegedly sustained while serving aboard the S/S Marcella, a vessel owned by Compania. Plaintiff alleges that his injuries resulted from defendants' negligence and the unseaworthiness of the ship.

The undisputed jurisdictional facts in this case may be briefly stated: (1) Plaintiff is a citizen and resident of Greece; (2) the accident took place in Canadian waters; (3) the S/S Marcella was of Panamanian registry; (4) defendant Compania is a Panamanian corporation; (5) the majority of Compania's stock is owned by residents and citizens of New York and (6) plaintiff was engaged as a crew member by Compania in the port of Baltimore.

Plaintiff alleges in his complaint that defendant Compania was "* * * entirely controlled and operated by citizens of the State of New York and of the United States." This allegation was denied and in its reply affidavit in support of this motion, Compania argues that the claim of control does no more than restate the admitted fact of stock ownership. Defendant Compania also asserts that at the time of the injury, the S/S Marcella was under charter to a Canadian citizen and that in the articles of employment which plaintiff signed, he agreed that in the event of injury, the rights of the parties would be determined according to the law of Panama.

In support of its motion to dismiss Compania argues that the facts of this case show insufficient contacts with the United States to support subject matter jurisdiction under the Jones Act. Thus, the first part of this motion presents but one substantial legal question: I must decide whether the Jones Act¹ is applicable to a case where the only significant contact with the United States is the ownership by Americans of the majority of the shares of the vessel's corporate owner. My determination of this question, like any similar inquiry into jurisdiction under the Jones Act, must begin with an examination of the leading case of Lauritzen v. Larsen, 1953, 345 U.S. 571, 73 S.Ct. 921, 97 L.Ed. 1254. There, the Supreme Court painstakingly analyzed the factors determining the choice of the applicable law in a case of this kind.² The law of the flag was found to be of cardinal importance but the Court was careful to point out that the law of the place of allegiance of the defendant shipowner could also be determinative. The Court wrote:

"It is common knowledge that in recent years a practice has grown, particularly among American shipowners, to avoid stringent shipping laws by seeking foreign registration eagerly offered by some countries. Confronted with such operations, our courts on occasion have pressed beyond the formalities of more or less nominal foreign registration to enforce against American shipowners the obligations which our law places upon them." 345 U.S. at page 587, 73 S.Ct. at page 931.

See also Gerradin v. United Fruit Co., 2 Cir., 60 F.2d 927, certiorari denied 1932, 287 U.S. 642, 53 S.Ct. 92, 77 L. Ed. 556, cited with approval in Lauritzen.

In the light of the clear language in Lauritzen and of other cases dealing with foreign ownership, I have grave doubt that it can any longer be seriously contended that the courts will not take jurisdiction of a Jones Act case where the plaintiff is an alien and this country's sole significant contact with the case is American ownership of the vessel itself. See Carroll v. United States, 2 Cir., 1943, 133 F.2d 690, 693; Gilmore & Black, Admiralty 388 (1957).

But Compania argues that in this case the ship's corporate owner (Compania Panamena Maritima San Gerassimo, S. A.), and not the vessel itself, is owned and controlled by Americans. The moving defendant urges me to hold that the rationale of Lauritzen does not cover this case. Under the view pressed by Compania, an American owner might escape his statutory liability merely by interposing a foreign corporation between himself and the vessel, both of which, for all practical purposes, he owns. I do not believe that the law can be so easily baffled. Cf. Central Vt. Transp. Co. v. Durning, 1935, 294 U.S. 33, 37, 55 S.Ct. 306, 79 L.Ed. 741. For the purposes with which we are concerned such corporate intervention is but a weak fortress. Indeed, shortly after the Supreme Court's decision in Lauritzen, the ineffectiveness of foreign incorporation as a shield against Jones Act liability was established by this court in Zielinski v. Empresa Hondurena de Vapores, D.C.S.D.N.Y.1953, 113 F.Supp. 93. There the court found Jones Act jurisdiction proper where all of the stock of a corporate owner of a foreign flag vessel was owned by an American corporation which had also chartered the ship, and the plaintiff was a Polish citizen domiciled in the United States.³ The court found the facts of that case substantially in line with those in Gerradin v. United Fruit Co., supra, involving a foreign flag ship owned by an American corporation. The addition of another corporate entity to the chain of ownership was treated as a distinction without a difference.

I am asked to distinguish Gerradin and Zielinski on the ground that they both involved American domiciliaries. A careful reading of those decisions convinces me that in both cases the ownership of the vessel was the key contact.

For the reasons stated and in the light of the foregoing authority, I find that majority ownership and control by Americans of the corporate owner of the vessel represents sufficient contact with the United States to justify the application of the Jones Act to this case.⁴

I am aware that my brethren in this district are split on the issue before me. In Rodriguez v. Solar Shipping, Ltd., D.C.S.D.N.Y., 169 F.Supp. 79 and in Petition of Volusia Steamship Co., Ad. 188-240 (S.D.N.Y. decided February 28, 1957), stock ownership by Americans was found to be a sufficient contact, while in Mproumeriotis v. Seacrest Shipping Co., D.C.S.D.N.Y.1957, 149 F.Supp. 265 and Argyros v. Polar Compania de Navegacion, Ltda., D.C.S.D.N.Y.1956, 146 F.Supp. 624, stock ownership was held not a sufficient contact to give the court Jones Act jurisdiction. The Mproumeriotis and Argyros cases were distinguished in the Rodriguez opinion on the ground that in those cases the plaintiffs did not allege both ownership and control. I note that the plaintiff in this case does allege control. Whether or not the distinction based on an allegation of control is valid, I believe, for the reasons I have already stated, that the result reached in the Rodriguez and Volusia cases is the correct one.

Since I have found that this court has subject matter jurisdiction over the Jones Act claim, defendant Compania's request that the court decline jurisdiction of claims under the General Maritime Law may be treated briefly. Having taken jurisdiction over the statutory claim, the court also exercises its discretion to accept...