Henry v. S/S BERMUDA STAR

• Decision Date: 26 January 1989
• Docket Number: No. 87-3285,87-3285
• Citation: 863 F.2d 1225
• Parties: 29 Wage & Hour Cas. (BN 201, 1989 A.M.C. 1392 Daniel HENRY, et al., Plaintiffs-Appellants, v. S/S BERMUDA STAR, etc., et al., Defendants-Appellees. Ramon Rodriguez ALVAREZ, et al., Plaintiffs-Appellants, v. BAHAMA CRUISE LINES, INC., et al., Defendants-Appellees.
• Court: U.S. Court of Appeals — Fifth Circuit

Page 1225

863 F.2d 1225

29 Wage & Hour Cas. (BN 201, 1989 A.M.C. 1392

Daniel HENRY, et al., Plaintiffs-Appellants, v. S/S BERMUDA STAR, etc., et al., Defendants-Appellees.

Ramon Rodriguez ALVAREZ, et al., Plaintiffs-Appellants, v. BAHAMA CRUISE LINES, INC., et al., Defendants-Appellees.

No. 87-3285.

United States Court of Appeals Fifth Circuit.

Jan. 26, 1989.

Robert A. Kosseff, Philadelphia, Pa., for Henry, et al.

Sidney H. Kalban, New York City, Stevan Dittman, New Orleans, La., for Alverez, et al.

Christopher O. Davis, New Orleans, La., for defendants-appellees.

Appeals from the United States District Court for the Eastern District of Louisiana.

Before BROWN, JOHNSON, and HIGGINBOTHAM, Circuit Judges.

JOHN R. BROWN, Circuit Judge:

As an interlocutory appeal from the Eastern District of Louisiana, ¹ this case presents questions regarding the interpretation of Panamanian law. Henry v. S/S BERMUDA STAR, 663 F.Supp. 1226, 1987 A.M.C. 1377 (E.D.La.1987). We affirm in part, reverse in part, and remand this case to the District Court for further consistent proceedings.

The plaintiffs in the instant case are some 139 seamen employed on board the S/S BERMUDA STAR by the defendant Bahama Cruise Lines, Inc., a Liberian corporation (now known as Bermuda Star Line, Inc.). The S/S BERMUDA STAR is registered under Panamanian law. The BERMUDA STAR cruises out of New York harbor in the spring and summer and out of New Orleans in the fall and winter. In November 1985 one group of seamen, the "Henry" plaintiffs, sued Bahama Cruise Lines in New Orleans claiming that they had not been paid fully under Panamanian law. In July 1986 another group of seamen, the "Alvarez" plaintiffs, sued in the District Court in New York for the same reasons. The New York suit was transferred to the Eastern District of Louisiana in August 1986 and the two cases were formally consolidated on October 16, 1986.

All the parties agree that Panamanian law applies to the labor relationship between the plaintiff seamen and the defendant employer. On August 20, 1986, the District Court appointed a special master, Dr. Humberto Ricord, ² to aid the court in determining foreign law. ³

Although the Alvarez plaintiffs disagree with many of the conclusions of the Special Master, they have never formally objected to the master himself. Dr. Ricord's report to the court essentially agreed with the defendant shipowner's interpretations of Panamanian law.

The District Court postponed the accounting calculations to determine whether as to each seaman plaintiff the amounts actually paid corresponded to those due under Panamanian law until completion of the seamen's interlocutory appeal. Since Fed.R.Civ.P. 44.1 states that determination of foreign law constitutes "a ruling on a question of law," we engage in de novo review of the District Court's determination. ⁴

Convenient or Inconvenient Forum?

We have decided that under existing circumstances it is inappropriate to invoke forum non-conveniens dismissal. The BERMUDA STAR has substantial, regular contacts with the United States, and almost no ties, other than its registry and contractual choice of law, with Panama. Moreover, both parties have already devoted considerable time and resources to the litigation in this country. Because the BERMUDA STAR is of Panamanian registry and because this labor dispute is governed by Panamanian law, we asked the parties to submit post-argument briefs addressing whether the case should be dismissed pursuant to the doctrine of forum non conveniens on the ground that Panama provides the more appropriate forum. Since both parties opposed dismissal, we need not determine whether under Gulf Oil Corp. v. Gilbert ⁵ and Piper Aircraft Co. v. Reyno, ⁶ such dismissal is available or appropriate. ⁷ Nor do we engage in the comparative analysis between private and public ⁸ factors.

Does the Panamanian Labor Code Go to Sea?

We agree with Special Master Ricord that Chapter VIII, division 1 of the Republic of Panama Labor Code ⁹ governs the relationship between the parties in this case. Our first recourse is, therefore, to these "specific provisions" of the Labor Code unless a specific provision expressly directs us to give preference to international maritime custom and usage. ¹⁰ Despite the Special Master's correct emphasis on the specific provisions of the Labor Code, we disagree with the Special Master's ultimate resolution of the formula for calculating overtime. Therefore, on the remand of this case to the District Court for calculation of specific sums, the formula established in this opinion must be used. The District Court, with the assistance of a fact-finding special master if it sees fit, must decide once and for all whether the wages and benefits paid to the seamen were proper.

I. The Master Speaks

We begin with a summary of the Report of the Special Master, adopted by the District Court as part of its Order & Reasons granting partial summary judgment for Bahama Cruise Line. ¹¹ The Special Master was requested to determine the following issues:

1. What is the law of the Republic of Panama concerning wages and overtime pay that must be paid to crew members employed on vessels registered in the Republic of Panama and engaged in international maritime commerce?

2. What is the law of the Republic of Panama concerning the payment of additional monetary benefits not considered wages, in particular the "Thirteenth Month" provided under Cabinet Decree No. 221 of 1971, vacation, repatriation and Sunday/holiday pay to crew members who are employed on vessels registered in the Republic of Panama and engaged in international maritime commerce?

3. Are the contractual wages, overtime pay and benefits paid to the plaintiffs by the defendant proper under the law of the Republic of Panama?

4. Are plaintiffs entitled under the law of Panama to any further payment of wages, overtime pay and benefits other than that which they have already received from defendant? ¹²

Minimum Wages & Overtime ¹³

The parties seem to agree that Panamanian law dictates a rate of 0.59 Balboas (B/0.59) ¹⁴ per hour as the minimum salary for crew members contracted outside the territory of Panama. They also agree that the hourly overtime rate for minimum wage is calculated at (minimum wage X 1.25). ¹⁵ The parties dispute whether an overtime rate of (minimum hourly wage X 1.25) is acceptable under the Labor Code where the crew member's contract provides a monthly salary with a base hourly wage greater than the minimum hourly wage.

The Special Master concluded that the wages paid were proper. ¹⁶ He found that in determining the legality of a wage under the Labor Code, the starting point is not the contractually established minimum wage, but the actual amount paid each crew member. If the actual wage exceeded the statutory minimum, there was no illegality in the employment contract.

Thirteenth Month

The Special Master concluded that the Thirteenth Month bonus was not applicable to members of the crew of a Panamanian vessel engaged in international maritime commerce. ¹⁷ The Thirteenth Month bonus was established by a Cabinet decree ¹⁸ prior to the enactment of the Labor Code and continues in effect as a law separate from the Labor Code. Consequently, the Thirteenth Month bonus is not a part of the Labor Code and is not applicable to contracts governed by the Code. The Special Master concluded that the Cabinet decree did not apply of its own force to seamen's contracts and the seamen were not entitled to a Thirteenth Month bonus.

Vacation Time

The individual contracts of the seamen provide for 14 or 15 days of annual vacation. Special Master Ricord concluded that under Article 262 of the Labor Code the crew members are entitled to a minimum of 12 days of vacation "for each year of uninterrupted service." ¹⁹ Since the individual contracts provided for annual vacation in excess of the legal minimum, the Special Master found no basis for a claim to additional pay for vacation over and above the amount provided in the contract. He also found no basis for pro rata vacation payments to seamen who had served for less than one year.

Repatriation ²⁰

Special Master Ricord next addressed the issue of repatriation costs. The contracts (Forms A and B) signed by the non-gratuity earning crew members of the S/S BERMUDA STAR provided that the shipowner would pay repatriation expenses upon completion of their contracts. The Special Master determined that these provisions which furnish the seamen with repatriation expenses to their respective countries of origin fulfill the shipowner's repatriation obligation under Article 255 of the Labor Code. ²¹

During the course of his contract, each crew member--gratuity or nongratuity earning--had his wages diminished by a monthly deduction for repatriation in the event the crew member left the vessel before the end of the voyage or was dismissed for cause. However, upon completion of a seaman's contract, the shipowner reimbursed the withholding from his wages ²² and thus evidently also covered the repatriation expenses as legally and contractually required. According to the Special Master, the employer has shouldered the burden of repatriation as required by the Labor Code.

Sunday and Holiday Pay

The Special Master next determined that the seamen were not entitled to additional pay for work on Sundays and national holidays. Special Master Ricord ²³ based this conclusion on the fact that Article 260 of the Labor Code permits the master to schedule and fix the shifts of seamen "in accordance with maritime usage." The Special Master concluded that the general provisions of the Labor Code which provide for pay for work on Sundays and national holidays apply only to land-based workers, not to workers on fishing and coastal vessels, or on Panamanian vessels in international trade. Finding no maritime usage reflected in the seamen's contracts or ship's articles to support the seamen's...