Coats v. Penrod Drilling Corp.

Decision Date18 October 1993
Docket NumberNo. 92-7378,92-7378
Citation5 F.3d 877
PartiesEarl Wayne COATS, Plaintiff-Appellee, Cross-Appellant, v. PENROD DRILLING CORPORATION, et al., Defendants, Penrod Drilling Corporation, and Hytorc, M.E., Defendants-Appellants, Cross-Appellees.
CourtU.S. Court of Appeals — Fifth Circuit

James O. Dukes, Bryant, Clark, Dukes, Blakeslee, Ramsay & Hammond, Gulfport, MS, Bernard H. Ticer, James O.M. Womack, Burke & Mayer, New Orleans, LA, for Penrod.

William B. Gibbens, III, Gelpi, Sullivan, Carroll & Gibbens, P.C., New Orleans, LA, for Hytorc, M.E.

Maurice C. Hebert, Jr., David M. Flotte, Hebert, Mouledoux & Bland, New Orleans, LA, for Coats.

Appeal from the United States District Court for the Southern District of Mississippi.

Before KING, HIGGINBOTHAM, and DeMOSS, Circuit Judges.


This is a maritime personal injury suit filed by a United States citizen against his employer, a corporation formed under the law of the United Arab Emirates, and the owner and operator of a jack-up drilling rig, a Delaware corporation with its principal place of business in Dallas, Texas. Plaintiff was injured aboard the rig off the coast of the United Arab Emirates. Under the general maritime law of the United States, a jury determined that the rig was unseaworthy, that its owner and plaintiff's employer were negligent, and awarded substantial damages. The employer appeals the district court's denial of its motion to dismiss for lack of personal jurisdiction, the application of American law, and the failure to dismiss based on forum non conveniens. The defendant appeals, urging us to abolish or modify the doctrine of joint and several liability in the context of comparative fault as well as reverse the district court's application of American law. Plaintiff cross-appeals the court's ruling that he was not a Jones Act seaman, the sufficiency of the evidence to support the jury's finding of contributory negligence, the directed verdict for defendants denying punitive damages under the general maritime law, the denial of prejudgment interest, and the amount of costs awarded. We affirm.


MIS is a corporation organized under the laws of Ras Al-Khaimah, United Arab Emirates with branch offices in Dubai and Abu Dhabi. It performs repair and maintenance services for oilfield and marine vessels, and its employees are all expatriates, primarily from India, Pakistan, and the United States. MIS uses Lee's Materials Services, Inc. in Houston, Texas to perform various services in the United States. Through Lee's, MIS advertised its job openings in the Houston Chronicle (Texas), Lafayette Advertiser (Louisiana), and Mobile Register (Alabama). During his trip, Shelton held a meeting in Laurel, Mississippi that was attended by several young men, including the plaintiff, Earl Wayne Coats. Shelton explained that he was soliciting employees to operate MIS equipment on certain offshore vessels.

In 1987, David Shelton, manager of the Hytorc Division of Maritime Industrial Services, travelled from the United Arab Emirates to Mississippi on vacation and to interview prospective employees for MIS. At the meeting, Shelton offered a job to Coats, and Coats accepted. Their agreement included thirty days per year of paid vacation with airfare back to Mississippi. MIS also promised to pay for Coats' return to Mississippi at the termination of his employment. The term of Coats' employment was indefinite. Coats obtained an updated passport as instructed by Shelton, and MIS, through Lee's Materials, sent him a plane ticket to Dubai. Coats arrived in the United Arab Emirates and started work on December 1, 1987.

While working for MIS, Coats lived on shore and worked on various jack-up rigs owned by different customers of MIS. The majority of Coats' work consisted of operating a hydraulically powered torque wrench used to loosen and tighten large nuts and bolts. During Coats' employment with MIS, Penrod Drilling Corporation, a Delaware corporation with its principal place of business in Dallas, Texas contracted for MIS to perform pressure testing on Penrod's Rig 69. The pressure testing was necessary to prepare the rig for its next drilling operation. At the time, Rig 69, a jack-up drilling rig, was located in the Port of Mina Saqr in the territorial waters of the United Arab Emirates. It was twenty feet from shore in forty feet of water and connected to land by a gangway. Rig 69 flies the United States flag, and its home port is New Orleans, Louisiana. Penrod maintained a local office in the United Arab Emirates to assist in the operation of Rig 69.

MIS assigned Coats to perform the pressure testing for Penrod. Coats was inexperienced at this task and had to ask for assistance from Penrod personnel. As Coats was working aboard Rig 69, Penrod's "bullplug" failed at a pressure less than it was rated to withstand, causing the fluid under pressure to erupt. The eruption knocked Coats down, resulting in a severe and disabling injury to his knee. After the accident, MIS flew Coats to Hattiesburg, Mississippi for treatment and started paying his medical expenses. Most of these payments were made through Lee's Materials. Meanwhile, MIS filled Coats' job with Chris Stennett, another Mississippi resident who attended Shelton's meeting in Laurel.

On April 10, 1989, Coats sued Penrod, MIS, and Lee's 1 in the Southern District of Mississippi. The complaint asserted federal jurisdiction based on diversity of citizenship and admiralty and alleges, inter alia, negligence on the part of Penrod and MIS, the unseaworthiness of Rig 69, and entitlement to maintenance and cure from MIS under the Jones Act. Soon thereafter, MIS terminated its payment of benefits to Coats. Coats then amended his complaint against MIS to seek compensatory and punitive damages under the general maritime law for wrongful termination of maintenance and cure and to allege wrongful termination of health insurance benefits under ERISA. Penrod cross-claimed against MIS for indemnity and contribution under the general maritime law.

Before trial, the district court issued a number of orders in response to motions filed by the parties. The court ruled that MIS had sufficient contacts with Mississippi to justify the assertion of personal jurisdiction and that it would apply United States law, rather than the law of the United Arab Emirates, to Coats' personal injury claims, 785 F.Supp. 614. Under American law, the court determined that Coats was not a Jones Act seaman, and therefore not entitled to maintenance and cure damages, but that Coats qualified as a Sieracki seaman with the attending right to sue under the warranty of seaworthiness. See Seas Shipping Co. v. Sieracki, 328 U.S. 85, 66 S.Ct. 872, 90 L.Ed. 1099 (1946). 2 The court also declined to dismiss the case under the doctrine of forum non conveniens.

The case proceeded to trial on Coats' claims against Penrod for negligence and unseaworthiness and against MIS for negligence, wrongful termination of maintenance and cure, and wrongful termination of benefits under ERISA. After the court directed a verdict against Coats on his claim for punitive damages based on MIS' termination of maintenance and cure, the jury returned a verdict for Coats, assessing damages of $925,000 and assigning 20% fault to Coats, 20% to Penrod, and 60% to MIS. The court reduced the award by Coats' comparative fault to $740,000 and entered judgment against Penrod and MIS jointly and severally. 3 The court also awarded costs to Coats in the amount of $7,889.04. All parties appealed.


We first address the issue of personal jurisdiction over MIS, a question that requires us to apply Mississippi's long-arm statute. See DeMelo v. Toche Marine, Inc. 711 F.2d 1260 (5th Cir.1983). 4 MIS contends that the Mississippi statute does not confer jurisdiction, and alternatively, that applying the statute to MIS violates due process. 5 The relevant facts are undisputed, and thus our review of this issue is de novo. Command-Aire Corp. v. Ontario Mechanical Sales and Serv. Inc., 963 F.2d 90, 93 (5th Cir.1992).

Because Coats' claims are not based on contract and the alleged tortious conduct of MIS occurred in the United Arab Emirates, the district court asserted personal jurisdiction over MIS under the catchall or "doing business" prong of the Mississippi statute. See Jones v. Chandler, 592 So.2d 966, 971 (Miss.1991) (referring to "doing business" as the catchall provision). 6 The first question is whether MIS was "doing business" in Mississippi. 7 Under the statute, one is "deemed to be doing business" if he "perform[s] any character of work or service in this state." Miss.Code Ann. Sec. 13-3-57. In McDaniel v. Ritter, 556 So.2d 303 (Miss.1989), the Mississippi Supreme Court further defined the term to include doing "various acts here for the purpose or realizing a pecuniary benefit or otherwise accomplishing an object." Id. at 309 (citing Restatement (Second) of Conflict of Laws Sec. 35 cmt. a (1971)). The Mississippi Supreme Court recently stated that the doing business prong "is so broad that it belies any suggestion it be limited to commercial activity." Jones, 592 So.2d at 971.

MIS' recruitment and hiring of employees in Mississippi meets the Restatement definition adopted by the Mississippi Supreme Court. MIS performed various acts in Mississippi to recruit Coats. Shelton, on behalf of MIS, held a meeting in Laurel. At that meeting, MIS hired Coats--and under terms that contemplated future contacts with Mississippi. MIS agreed to fly Coats back to Mississippi every year of his employment for his thirty-day vacation, and MIS employed Coats for an indefinite term. When Coats was injured, MIS returned him to Mississippi for treatment and started paying for his medical expenses. Moreover, Coats was not the only Mississippi resident MIS recruited and hired. After Coats' accident, MIS replaced him with Chris...

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