George v. Kramo Ltd., Civ. A. No. 90-2483.

• Decision Date: 18 June 1992
• Docket Number: Civ. A. No. 90-2483.
• Citation: 796 F. Supp. 1541
• Parties: W. Kendall GEORGE, et al. v. KRAMO LIMITED, et al.
• Court: U.S. District Court — Eastern District of Louisiana

796 F. Supp. 1541

W. Kendall GEORGE, et al. v. KRAMO LIMITED, et al.

Civ. A. No. 90-2483.

United States District Court, E.D. Louisiana.

June 18, 1992.

Jerry Bythel Read, Paul T. Benton, Biloxi, Miss., James Thomas Dulin, Jr., Gulfport, Miss., for plaintiffs.

John Frederick Kessenich, Michael G. Helm, Emmett, Cobb, Waits & Kessenich, William Alexander Porteous, III, Porteous, Hainkel, Johnson & Sarpy, William B. Gibbens, III, Gelpi, Sullivan, Carroll & Laborde, Richard M. Perles, Faris, Ellis, Cutrone & Gilmore, New Orleans, La., for defendants.

MEMORANDUM AND ORDER

SEAR, Chief Judge.

BACKGROUND

Plaintiffs were employed as crew members of a vessel on a voyage from Houma, Louisiana to Seattle, Washington. During the voyage, the vessel sustained a fire in her engine room and was disabled. The vessel was towed to the Panama Canal where she was seized and later sold. Plaintiffs were discharged from their employment, but were not paid their wages for over one year. Plaintiffs seek to recover penalty wages from the vessel owner for the delay in payment of their wages. They have sued Kramo Limited (UK) and Kramo Transportation, Inc. At the pretrial conference, counsel conceded that there were no disputes of fact and that the sole questions were whether the Seaman's Penalty Wage Statute ("Statute")¹, under which plaintiffs have sued, applies to this voyage and, if so, who is liable for the payment of penalty wages. Accordingly, the parties filed joint stipulations of fact and cross-motions for summary judgment.

ANALYSIS

I. Does the statute apply?

The parties have stipulated that the vessel, which weighed more than 75 gross tons,² departed Houma, Louisiana on a voyage bound for the State of Washington via the Panama Canal.³ No intermediate stops other than that necessary to transit the Panama Canal were scheduled as part of the voyage.⁴ The voyage ended at the Panama Canal because a fire disabled the vessel and it was seized for non-payment of debt.⁵ The Statute applies only to voyages between a port in the United States and a port in a foreign country or to vessels of at least 75 gross tons on a voyage between a port of the United States on the Atlantic Ocean and a port of the United States on the Pacific Ocean.⁶ Plaintiffs contend that the Statute applies to the voyage in question under either provision. The Statute's application under § 10301(a)(1) turns on whether the transit of the Panama Canal should be considered a port of call. The Statute's application under § 10301(a)(2) turns on whether a port on the Gulf of Mexico should be considered to be a port on the Atlantic Ocean. The Statute applies to this voyage if either provision applies.

The voyage clearly was intended to be one from Houma, Louisiana to Seattle, Washington. The only scheduled ports for the vessel were Houma and Seattle but it was necessary for the vessel to transit the Panama Canal in a foreign country, the Republic of Panama. Plaintiffs contend that the transit of the Canal should be considered a call in a foreign port because the vessel was required to stop in Christobal, Republic of Panama in order to clear customs. Plaintiffs argue that the voyage, therefore, was a voyage between a port in the United States (Houma, Louisiana) and a port in a foreign country (Christobal, Republic of Panama). Defendants argue that the voyage was between Houma and Seattle, both ports of the United States. That the voyage included a transit of the Canal, defendants argue, did not make the voyage one from a port in the United States to one in a foreign country.

Plaintiffs have produced the affidavit of George Markham, a member of the Panama Canal Commission, Canal Operations Unit. Mr. Markham states that in order for the vessel to make its first time transit of the Canal, the vessel would be required to put into the port of Christobal, and make fast to the mooring buoy in the harbor to be inspected and admeasured for purposes of determining what tolls it must pay in order to pass through the canal.⁷ Regardless, I find that such a stop does not convert a voyage between two ports in the United States into a voyage between a port in the United States and a port in a foreign country, within the meaning of 46 U.S.C. § 10301. In fact, had the vessel transited the Canal before, the stop at Christobal would not have been required at all. The distinction for whether the statute applies should lie in the nature of the voyage, not in whether a regulatory stop is required. In the alternative, plaintiffs argue that the voyage was one between a port of the United States on the Atlantic Ocean and a port of the United States on the Pacific Ocean. Plaintiffs contend that the Gulf of Mexico, on which Houma, Louisiana is located, is part of the Atlantic Ocean.

The Random House College Dictionary defines "gulf" as "a portion of an ocean or sea partly enclosed by land." The American College Dictionary defines "Gulf of Mexico" as "an arm of the Atlantic between the United States, Cuba and Mexico." The United States Supreme Court, in Merchants' Mutual Ins. Co. v. Allen,⁸ affirmed the Circuit Court of the United States for the Eastern District of Louisiana in finding that an insurance policy covering a ship in the Atlantic trade included activities in the Gulf of Mexico. In Allen, a vessel whose voyages were between New Orleans and Liverpool, England, was wrecked in the Gulf of Mexico. The issue was whether the insurance policy, which covered the vessel during its Atlantic trade, covered the vessel while in the Gulf of Mexico. The Court looked at the purpose of the insurance policy, the contemplation of the parties, and the exclusions of the policy and held that it was intended that the policy cover activities in the Gulf of Mexico.

Allen was later cited in the Department of Transportation, Coast Guard Law Bulletin, No. 429 at 16-17 (March 1982) as support for the Coast Guard's interpretation of 46 U.S.C. § 564⁹ that the Atlantic Ocean includes the Gulf of Mexico. The Coast Guard was faced with the issue of whether a penalty for shipping a crew without an agreement could be levied against a ship that had departed from Corpus Christi, Texas. The language of § 564 regarding applicable ports was identical to § 10303 and provided for the penalty for voyages from a port on the Atlantic to a port on the Pacific. The Coast Guard found that "port on the Atlantic" must be read in the overall context of the statute and the purposes for which it was enacted and held that Corpus Christi was such a port.

The Coast Guard first noted a previous Fifth Circuit case¹⁰ in which the applicable statute referred to the Eastern Coast, a term that obviously excluded the Southern and Western Coasts, and so would have excluded a port such as Corpus Christi. The Coast Guard found it significant that § 564 made no East Coast/Southern Coast distinction, but referred only to Atlantic and Pacific ports. The Coast Guard then analyzed § 564 and found that because the statute's goal was protection, and because it specifically contained only certain exclusions, it intended a broad reading. Therefore, the Coast Guard held that "port on the Atlantic" must include ports on the Gulf of Mexico.

No other cases could be found addressing whether the Atlantic Ocean, as used in the applicable Statute, includes the Gulf of Mexico. What little is available favors finding that it does. The Statute could have excluded ports on the Gulf of Mexico, but it did not. It is not straining the Statute's intent, nor its wording, to find that a port on the Atlantic would include a port on the Gulf of Mexico. The legislative intent of the Statute and its precursors was "to protect seamen from the harsh consequences of arbitrary and unscrupulous actionss of their employers."¹¹ Because the nature of the statute is remedial, it should be read as broadly as possible. Because Houma is located on the Gulf of Mexico, a voyage from Houma, Louisiana to Seattle, Washington is covered by 46 U.S.C. § 10301. 46 U.S.C. § 10313(f) provides for the payment of wages at the end of such a voyage. 46 U.S.C. § 10313(g) provides:

When payment is not made as provided under subsection (f) of this section without sufficient cause, the master or owner shall pay to the seaman 2 days' wages for each day payment is delayed.

The vessel left Houma on January 4, 1990 and was seized in Panama for nonpayment of debts on February 14, 1990.¹² Plaintiffs were not paid their wages until March 16, 1991.¹³ The parties stipulate that after the voyage was terminated, plaintiffs' wages remained unpaid for 395 days.¹⁴

However, defendants contend that sufficient cause existed for failure to timely pay wages and they disagree on who is liable for the penalty wages.

II. Was there sufficient cause for delay?

In construing § 10313's predecessor, § 596, the United States Supreme Court defined "without sufficient cause" to connote conduct that is arbitrary, willful, or unreasonable, or at least a failure not attributable to inability or impossibility of payment.¹⁵

Defendant Kramo Transportation contends that it was unable to make payment because of its financial inability and argues that the seizure of the vessel in Panama for nonpayment of debts is proof of this financial instability. Defendant contends that there are no facts before the Court upon which it can be concluded that the delay in payment was either willful, arbitrary or unreasonable.

Once the seaman establishes delay in the payment of wages, the burden of proof falls upon the master to show that the delay was justified.¹⁶ Financial insolvency and arrest of the vessel constitutes "sufficient cause" for failure to make payment.¹⁷ The parties stipulate that the vessel was seized and eventually sold for nonpayment of debts,¹⁸ but they do not stipulate either that payment was withheld without sufficient cause, or that defendant was insolvent. However, a determination can be made on summary judgment...