Douglass v. Nippon Yusen Kabushiki Kaish

• Court: U.S. District Court — Eastern District of Louisiana
• Writing for the Court: LANCE M. AFRICK, UNITED STATES DISTRICT JUDGE
• Citation: Douglass v. Nippon Yusen Kabushiki Kaish, 465 F.Supp.3d 610 (E.D. La. 2020)
• Decision Date: 04 June 2020
• Docket Number: CIVIL ACTION No. 19-13688
• Parties: Stephen DOUGLASS et al. v. NIPPON YUSEN KABUSHIKI KAISHA

465 F.Supp.3d 610

Stephen DOUGLASS et al.

v.NIPPON YUSEN KABUSHIKI KAISHA

CIVIL ACTION No. 19-13688

United States District Court, E.D. Louisiana.

Signed June 4, 2020

Craig Isenberg, Laurence D. LeSueur, Jr., Barrasso Usdin Kupperman Freeman & Sarver LLC, New Orleans, LA, David M. Schloss, Pro Hac Vice, Kasey Kendra Murray, Pro Hac Vice, Koonz McKenney Johnson & DePaolis LLP, Washington, DC, Thomas J. Schoenbaum, Pro Hac Vice, Seattle, WA, for Stephen Douglass, Dora Hernandez, Lan Huynh, Darrold Martin, Erin Rehm, Lloyd Wayne Rigsby, Jr., Carmen Sibayan.

SECTION I

ORDER & REASONS

LANCE M. AFRICK, UNITED STATES DISTRICT JUDGE

Before the Court are two motions—defendant Nippon Yusen Kabushiki Kaisha's ("NYK Line") motion¹ to dismiss for lack of personal jurisdiction pursuant to Federal Rule of Civil Procedure 12(b)(2), and plaintiffs’ motion² for leave to conduct jurisdictional discovery. For the following reasons, NYK Line's motion is granted and plaintiffs’ motion is denied.

I.

This case arises out of a tragic collision between the USS Fitzgerald and the ACX Crystal in Japanese territorial waters on June 17, 2017.³ Seven United States Navy sailors onboard the USS Fitzgerald died as a result of the collision.⁴ The ACX CRYSTAL was, at all pertinent times, a commercial container vessel chartered to NYK Line.⁵ Plaintiffs Stephen Douglass, Dora Hernandez, Lan Huynh, Darrold Martin, Erin Rehm, Lloyd Wayne Rigsby, Jr., and Carmen Sibayan, individually and as personal representatives of their deceased relatives, assert wrongful death claims and survival actions against NYK Line pursuant to the Death on the High Seas Act, 46 U.S.C. § 30301 et seq.⁶

NYK Line is a corporation incorporated and headquartered in Japan that provides global logistics services, which include cargo transport by air and sea and various other services.⁷ According to the declaration of Yutaka Higurashi ("Higurashi"), a corporate officer of NYK Line, the company's shareholder and board of directors meetings take place in Japan, which has always been and continues to be the center of NYK Line's operations and corporate decision-making.⁸ NYK Line currently does not maintain a physical office in the United States, and it has not done so for over twenty-five years.⁹

Plaintiffs allege in their amended complaint that NYK Line's contacts with the United States include operating air-cargo service at six U.S. airports and cargo transport by sea at twenty-seven shipping terminals in U.S. ports; regularly calling on at least thirty U.S. ports; and dedicating seven of its vessels exclusively for the delivery of Toyota automobiles to the United States.¹⁰ Plaintiffs assert that NYK Line has at least one bank account in the United States at HSBC Bank USA, N.A. in New York, and they highlight that shares of NYK Line stock, for which the Bank of New York Mellon operates as the depository, can be purchased by U.S. investors.¹¹

Plaintiffs point to the criminal prosecution of NYK Line by the United States Department of Justice with respect to a criminal price fixing conspiracy from 1997 to at least 2012 as further evidence of the company's contacts with the United States.¹² Plaintiffs further highlight that NYK Line's operations in the United States are subject to "considerable oversight" by the Federal Maritime Commission, which licenses NYK Line to operate in the United States.¹³

Plaintiffs contend that NYK Line is a frequent litigant in U.S. courts, having initiated at least thirty lawsuits since 2010.¹⁴ Plaintiffs further assert that at least thirty-two cases have been filed against NYK Line in U.S. courts over the last ten years, none of which have been dismissed for lack of personal jurisdiction.¹⁵ NYK Line also allegedly stipulates in its bills of lading and sea waybills with shippers using its carrier service that the Southern District of New York has exclusive jurisdiction to hear all disputes arising from shipments to or from the United States.¹⁶

NYK Line indirectly owns a majority share of NYK Ports, LLC, a Delaware corporation that indirectly acquired a minority share of Maher Terminals, LLC, another Delaware corporation that operates the largest terminal in the Port of New York and New Jersey.¹⁷ NYK Line also indirectly owns a minority share of Japan LNG Investment, LLC, which is incorporated in Delaware and is a partner and shareholder of Cameron LNG, LLC ("Cameron").¹⁸ Cameron recently opened a natural gas facility in Hackberry, Louisiana, which, according to plaintiffs, is projected to produce twelve million tons of liquefied natural gas per year.¹⁹ Plaintiffs assert that NYK Line signed a deal to manage the shipment of the natural gas from Louisiana.²⁰

A number of NYK Line's subsidiaries also engage in business in the United States. NYK Line operates over two hundred subsidiaries worldwide, eleven of which are headquartered in this country.²¹

Ten of these eleven subsidiaries are wholly owned by NYK Line.²² Plaintiffs make numerous assertions about these subsidiaries’ contacts with the United States, many of which Higurashi addresses in his declaration. For example, the Higurashi declaration clarifies that NYK Line wholly owns NYK Group Americas, Inc. ("NGA"), a holding company incorporated in Delaware for NYK Line's other U.S. entities.²³ NYK Line (North America), Inc. ("NYK NA") is a subsidiary of NGA and has offices in New Jersey, California, Texas, Maryland, Florida, and Illinois.²⁴

Plaintiffs assert that NYK Line operates its wholly-owned subsidiaries in the United States "as a corporate group and an integrated whole."²⁵ Plaintiffs point to NYK Line's adoption of several policies that apply to all of its subsidiaries and their directors and employees, such as a code of conduct, mission statement, business credo, and management policy, among others.²⁶ Plaintiffs highlight that the chief executive officer of NYK NA, Hiroshi Kubota ("Kubota"), is also a corporate officer of NYK Line.²⁷ However, the Higurashi declaration states that Kubota is the former president of NYK NA; he resigned from that position in 2017 and returned to Japan in 2018 to work as a corporate officer of NYK Line.²⁸ Plaintiffs do not provide any evidence rebutting Higurashi's declaration, but they maintain in their motion for leave to conduct jurisdictional discovery that Kubota is currently the chief executive officer of NYK NA and also a corporate officer of NYK Line.²⁹

At the end of fiscal year 2018, twenty-four of NYK Line's 1,732 employees resided in the United States.³⁰ These twenty-four employees were working in the United States pursuant to secondment agreements.³¹ NYK Line and its subsidiaries, in total, employed 35,711 people worldwide at the end of fiscal year 2018, 2,106 of whom resided in North America.³²

NYK Line's consolidated revenue that originated from North American entities for the fiscal years ending March 31, 2017 and March 31, 2019 was $1.36 billion and $1.47 billion, respectively.³³ These figures represent between seven and nine percent of NYK Line's worldwide consolidated revenue for the same time periods.³⁴

On November 18, 2019, plaintiffs initiated suit.³⁵ NYK Line filed a motion³⁶ to dismiss plaintiffs’ amended complaint for lack of personal jurisdiction pursuant to Federal Rule of Civil Procedure 12(b)(2), which plaintiffs oppose.³⁷ Plaintiffs filed a motion³⁸ for leave to conduct jurisdictional discovery in the event that the Court finds that they did not establish a prima facie case of personal jurisdiction, which NYK Line opposes.³⁹

II.

The Court may require a nonresident defendant to appear before it, but its jurisdictional power is restricted by constitutional and statutory bounds. When a nonresident defendant files a motion to dismiss for lack of personal jurisdiction pursuant to Rule 12(b)(2), the plaintiff bears the burden of establishing the district court's jurisdiction over the nonresident defendant. Adams v. Unione Mediterranea Di Sicurta , 220 F.3d 659, 667 (5th Cir. 2000). When the court considers a motion to dismiss for lack of personal jurisdiction without holding an evidentiary hearing, as the Court does here, the plaintiff need only present a prima facie case showing that personal jurisdiction is proper.⁴⁰ Sealed Appellant 1 v. Sealed Appellee 1 , 625 F. App'x 628, 631 (5th Cir. 2015).

To resolve the jurisdictional issue, the Court may receive "any combination of the recognized methods of discovery." Walk Haydel & Assocs., Inc. v. Coastal Power Prod. Co. , 517 F.3d 235, 241 (5th Cir. 2008). But "on a motion to dismiss for lack of jurisdiction, uncontroverted allegations in the plaintiff's complaint must be taken as true, and conflicts between the facts contained in the parties’ affidavits must be resolved in the plaintiff's favor for purposes of determining whether a prima facie case for personal jurisdiction exists." Johnston v. Multidata Sys. Int'l Corp. , 523 F.3d 602, 609 (5th Cir. 2008) (citation and quotation marks omitted). Even so, a court need not credit conclusory allegations, even if they are uncontroverted. Panda Brandywine Corp. v. Potomac Elec. Power Co. , 253 F.3d 865, 869 (5th Cir. 2001) (per curiam).

The United States Supreme Court has divided personal jurisdiction into two types—specific or "conduct-linked" jurisdiction and general or "all-purpose" jurisdiction. Daimler AG v. Bauman , 571 U.S. 117, 122, 134 S.Ct. 746, 187 L.Ed.2d 624 (2014) ; Sangha v. Navig8 ShipManagement Private Ltd. , 882 F.3d 96, 101 (5th Cir. 2018). The former depends on a connection between the forum state and the underlying controversy, permitting courts to exercise jurisdiction over a nonresident defendant when that defendant has "purposefully directed" his activities at the forum state "and the litigation results from alleged injuries that arise out of or relate to those activities." Burger King Corp. , 471 U.S. 462, 472, 105 S.Ct. 2174, 85 L.Ed.2d 528 (1985) (emphasis added); see also Goodyear Dunlop Tires Operations S.A. v. Brown , 564...