In re Compania Naviera Joanna S.A.

• Decision Date: 01 November 2007
• Docket Number: C/A No. 2:07-CV-001531-DCN.
• Citation: 531 F.Supp.2d 680
• Parties: In re COMPANIA NAVIERA JOANNA S.A., as owner, and MSC Mediterranean Shipping Company S.A, as bareboat charterer of the M/V MSC Joanna, for exoneration from or limitation of liability.
• Court: U.S. District Court — District of South Carolina

531 F.Supp.2d 680

In re COMPANIA NAVIERA JOANNA S.A., as owner, and MSC Mediterranean Shipping Company S.A, as bareboat charterer of the M/V MSC Joanna, for exoneration from or limitation of liability.

C/A No. 2:07-CV-001531-DCN.

United States District Court, D. South Carolina, Charleston Division.

November 1, 2007.

Douglas Manning Muller, Moore and Van Allen, Charleston, SC, for Compania Naviera Joanna S.A., as owner.

Adriane Malanos Belto, Gordon D. Schreck, Buist Moore Smythe and McGee, Charleston, SC, for MSC Mediterranean Shipping Company S.A, as bareboat charterer of the M/V MSC Joanna, for exoneration from or limitation of liability.

ORDER and OPINION

DAVID C. NORTON, Chief Judge.

On June 1, 2007, Compania Naviera Joanna, S.A. and MSC Mediterranean Shipping Co., S.A. ("petitioners") filed this limitation action pursuant to Supplemental Rule F, seeking exoneration or to limit its liability for claims arising from a collision that occurred between the MSC JOANNA a container vessel, and the W.D. FAIRWAY, a dredge owned and operated by claimants, in Chinese territorial waters near Tianjin, China. Kininklijke Boskalis Westminster NV, Westminster International BV, and Boskalis International BV ("claimants") have filed a claim for damages of approximately $326 million. This matter is before the court on three motions: (1) petitioners' motion to dismiss on forum non conveniens grounds; (2) claimants' motion to transfer venue to the Southern District of Texas; and (3) claimants' motion to lift the restraining order and to stay the limitation proceeding. For the reasons stated below, the court grants petitioners' motion to dismiss on forum non conveniens grounds, concluding that China provides an available, more convenient forum. Claimants' motions to transfer venue and to stay the limitation proceeding are accordingly denied.

I. BACKGROUND

On March 8, 2007, a collision occurred between the MSC JOANNA and the W.D. FAIRWAY. It is undisputed that the collision occurred in the territorial waters of the People's Republic of China, in an area under the jurisdiction of the Tianjin Admiralty Court. The W.D. FAIRWAY, which was the, world's largest suction hopper dredge, sustained significant damage.

The MSC JOANNA is owned by Compania Naviera Joanna, S. A., a Panamanian corporation. The MSC JOANNA was and is registered in Panama. MSC Mediterranean Shipping Company, which is organized under the laws of Switzerland, was the bareboat charterer of the MSC JOANNA at the time of the collision and continues to charter the vessel. According to petitioners, the MSC JOANNA operates exclusively between China and Europe, and has never called at a United States port. At the time of the collision, the MSC JOANNA's crew consisted of Italian, Croatian, Indonesian, Polish, and Yugoslavian nationals.

The W.D. FAIRWAY is owned by Westminster of the Netherlands, a Dutch corporation. The W.D. FAIRWAY Was and is registered in the Netherlands. The vessel was chartered to Tianjin Dredging Company, a Chinese corporation, although claimants contend the charter was a prerequisite to dredging in Chinese waters and that the Tianjin Dredging Company was not involved in the vessel's navigation or operation. As with the MSC JOANNA, the W.D. FAIRWAY'S crew had no United States citizens. Its crew consisted of Dutch, Lithuanian, Swedish, and Filipino nationals.

Following the collision, a Chinese governmental agency (the Yantai Salvage Bureau) conducted salvage operations on the W.D. FAIRWAY in the ports of Tianjin and Qinhuangdao, China. Temporary repairs were made to the MSC JOANNA at the Xingang Shipyard in Tianjin and permanent repairs were made by Samsung Heavy Industries in South Korea. The Maritime Safety Administration, a Chinese agency that petitioners assert is similar to the United States Coast Guard, conducted an investigation into the collision. According to an affidavit submitted by petitioners, the Maritime Safety Administration's investigation included interviews with the crews of both vessels and the harbor pilots, review and retention of vessel records, the taking of photographs, obtaining records on weather and sea conditions, and obtaining records of radar and VHF radio data. Pet. Mem. Supp. Ex. 1 ¶¶ 5-7.

On March 12, 2007, Westminster NV applied to the Tianjin Admiralty Court for an evidence preservation order, which the court apparently granted. The Tianjin Admiralty court, upon the application of the Tianjin Dredging Company, arrested the MSC JOANNA on March 16, 2007.

Petitioners instituted a limitation action the Tianjin Admiralty Court on March 29, 2007. That court established, a claims deadline of June 30, 2007. In May 2007, claimants instituted Rule B attachment proceedings against four other MSC-chartered vessels in four different United States district courts, including the District of South Carolina. Petitioners then brought this Rule F' limitation action as a defensive measure to prevent further attachments, posted in excess of $110 million in security, and reserved the right to move for dismissal on forum non conveniens grounds. Claimants have filed an answer and have claimed damages of approximately $326 million.

II. DISCUSSION

A. Forum Non Conveniens in the Limitation Context.

As an initial matter, this case's procedural posture does not prevent petitioners from, moving to dismiss on forum non conveniens grounds. In M/S Bremen v. Zapata Off-Shore Co., 407 U.S. 1, 92 S.Ct. 1907, 32 L.Ed.2d 513 (1972), the Supreme Court considered whether the petitioner in a maritime limitation action could move to enforce a forum-selection clause that selected the United Kingdom as the appropriate forum. The Court concluded that the lower courts erred in refusing to enforce the clause. In doing so, the Court noted that it was unconcerned by the fact that the movant was also the party who filed the limitation action. See id. at 19-20, 92 S.Ct. 1907. The Court viewed the limitation action as "purely a defense measure" that did not interfere with the petitioner's ability to move for the enforcement of the forum selection clause. Id. at 19, 92 S.Ct. 1907.

The Southern District of Texas reached a similar conclusion when the petitioner in a limitation action sought to dismiss on forum non conveniens grounds. See In re Geophysical Sera, Inc., 590 F.Supp. 1346 (S.D. Tex.1984). The claimants there, like the claimants in this case, argued that a petitioner could not make such a motion after invoking the limitation procedure. See id. at 1354. The court, citing the Supreme Court's decision in Bremen, held that the "[p]etitioners invoked the limitation action as a defensive measure, in response to the many lawsuits filed against them in numerous federal and state courts in Texas." Id. The district court further reasoned:

Petitioners had no other prudent alternative when faced with Claimants' efforts to litigate the same controversy in numerous courts in Texas. Indeed, certain of the Claimants successfully blocked Petitioners' previous efforts to remove some of the actions filed in Texas state court into federal court, thus precluding consolidation of the suits in one federal court. Lacking any other procedural mechanism to consolidate all the claims arising from this controversy, Petitioners elected to exercise their right to invoke a limitation, of liability action in order to consolidate all claims and dispose of them in one action.

Id. at 1355.

In opposing the instant motion, claimants refer to the Fifth Circuit's opinion in Karim v. Finch Shipping Co., 265 F.3d 258 (5th Cir.2001). The vessel owner in Karim filed a limitation action and then moved to dismiss, arguing there was no personal jurisdiction over the vessel owner in addition to asserting res judicata and forum non conveniens grounds. Id. at 262. The district court denied the motions and, on appeal, the Fifth Circuit considered whether the vessel owner could raise a personal jurisdiction defense after it instituted the limitation action. See id. at 262, 265-66. `The Fifth Circuit held that the vessel owner could not do so, reasoning that it made little sense to allow a party who voluntarily submitted to a court's jurisdiction to later argue the court had no personal jurisdiction over it. See id. at 265-66. The shipowner argued that the Supreme Court's decision in Bremen supported its position, but the Fifth Circuit distinguished Bremen on two grounds. Id. at 266. First, the court of appeals concluded that Bremen did not hold that a party who initiates a limitation action is not subject to the jurisdiction of the United States court. Id. at 266-67. Second, the question in Bremen was not whether the court had jurisdiction, but whether the court should have exercised that jurisdiction. Id. at 267.

Notably, Karim addressed whether the district court erred in denying the shipowner's motion to dismiss on forum non conveniens grounds. See id. at 268. The Fifth Circuit considered such a motion to be appropriate, see id. at 268-69, even noting that "the limitation issue is ... to be taken as yet another factor to consider in the well-established Gulf Oil/Piper Aircraft framework." Id. at 269. Although the Fifth Circuit concluded the district court did not abuse its discretion in denying the motion to dismiss, its analysis makes clear that a party who initiates a limitation action may also move to dismiss on the basis of forum non conveniens.

B. Application of Forum. Non Conveniens in this Case

Under the common law doctrine of forum non conveniens, a district court will dismiss an action only if transfer to the proper alternative forum cannot be accomplished via 28 U.S.C. § 1404. See Wright and Miller, 14D Federal Practice & Procedure § 3828. at 614-623 (2007). Because a district court can transfer a case to any other district under § 1404, the traditional forum non conveniens doctrine applies when the more convenient, alternative forum is in another country., Amer....