Mateo v. M/S KISO

Citation805 F. Supp. 761
Decision Date19 November 1991
Docket NumberNo. C-90-2357 DLJ.,C-90-2357 DLJ.
CourtU.S. District Court — Northern District of California
PartiesDiosdado MATEO, et al., Plaintiffs, v. The M/S KISO, et al., Defendants.




Marvin Stender, of McTernan, Stender & Walsh of San Francisco, Cal., and Richard Dodson, Sole Practitioner, of Baton Rouge, La., for plaintiffs.

Frederick W. Wentker, Jr., and Phillip Dalton, Esq. of Lillick & Charles of San Francisco, Cal., for defendants.


JENSEN, District Judge.

The present motions came on for hearing before this Court on June 14, 1991. Richard Dodson appeared for plaintiffs. Frederick Wentker appeared for defendants. For the reasons set out below, plaintiffs' motion for summary judgment is GRANTED IN PART and DENIED IN PART. Defendants' motion for summary judgment is DENIED, subject to the terms of this Order. Plaintiffs' motion for class certification is DENIED. Defendants' motion for dismissal of plaintiffs' class allegations without leave to amend is GRANTED. Defendants' motion to strike paragraph 15 of the complaint1 is DENIED. Defendants' motion for leave to deposit funds into the Court is GRANTED.


The present motions arise from an action by twenty Filipino seamen working aboard the M/S Kiso (the "Kiso") against the Kiso, in rem, and the owners and managers of the Kiso. The Kiso is a Liberian flagged vessel which carries goods between the U.S. and Japan. The title owner of the Kiso is defendant Vesta Company, Ltd, ("Vesta") a Liberian corporation. The beneficial owner of the Kiso, however, is a Japanese corporation, defendant Nippon Yusen Kaisha Ship Management Corporation ("NYK"). The officers of the Kiso are also all Japanese. Vesta contracted the responsibility for managing the Kiso to defendant Orion Shipping Co., Ltd. ("Orion"), a Japanese corporation.

The gist of the plaintiffs' allegations is that plaintiffs were subject to a pervasive pattern of abuse by the owners, officers, and managers of the Kiso, including the underpayment of wages. The parties now bring cross-motions regarding class-certification and for summary judgment. Defendants also bring a motion to dismiss paragraph 15 of the complaint and a motion for leave to deposit funds into the Court. The relevant facts are as follows.

A. Plaintiffs' Contracts At The Time Of Boarding.

All of the plaintiffs are members of the Association of Marine Officers' and Seamens' Union of the Philippines (AMOSUP), which is the Philippine national affiliate of the International Transport Workers' Federation (ITF). In the fall of 1989, plaintiffs were hired in the Philippines through a Filipino vessel manning agency, Trans-Phil Marine Enterprises ("Trans-Phil"). At the time they were hired, the plaintiffs signed a number of documents.

First, plaintiffs executed two contracts at the office of Trans-Phil. One of these contracts was a form prescribed by the Philippine Overseas Employment Administration (POEA), a government agency which regulates the employment of Philippine seamen on foreign vessels. The other contract was a form prescribed by AMOSUP. Defendants caused these contracts to be processed in accordance with Philippine law, and the POEA issued an Overseas Employment Certificate (OEC).

The two contracts, and the resulting OEC all adopted the wage rates and terms of the 1989 AMOSUP Collective Bargaining Agreement (the "1989 CBA"). On the basis of the two signed contracts and the OEC, Trans-Phil issued each plaintiff "Embarkation Orders" in an envelope. It is undisputed that the Embarkation Orders contained terms which were different, and less favorable to plaintiffs than the 1989 CBA. Plaintiffs' state in their declarations, however, that the envelopes containing the Embarkation Orders were sealed, and that they had no knowledge of the contents of the Orders. Defendants deny that the envelopes were sealed, but have come forward with no evidence that plaintiffs knew the terms of the Embarkation Orders at the time they were issued.

With their OEC and Embarkation Orders in hand, plaintiffs left Manilla and boarded the Kiso. Upon boarding the Kiso, plaintiffs signed shipboard articles. These articles also described the wages and working conditions applicable to plaintiffs, and adopted the wage rates and provisions of the 1989 CBA.

B. Critical Contract Terms.

The terms governing compensation to plaintiffs for their service aboard the Kiso are critical to the present motions and have been heavily briefed by the parties. Most relevant are the terms of the 1989 CBA identifying the wage components, and governing the resolution of wage disputes.

The 1989 CBA identifies six wage components which are relevant to the present proceedings. First, the 1989 sets the base wage rate for able bodied seamen at $821.00 per month. Each seamen does not receive a wage of $821.00 per month, rather this rate establishes a benchmark from which each seamen's wage is calculated based on his particular position, seniority, etc. Plaintiffs' Embarkation Orders called for a base rate of $400.00 per month.

Second, Article IX of the 1989 CBA provides for vacation pay accumulated at the rate of six days wages for every month of employment. Third, Article VII of the 1989 CBA, and Appendix A attached at the back, set working hours and provide for overtime pay for work outside of normal working hours.

Fourth, Article III obligates the operator of the Kiso to "furnish transportation ... from the port/seaport of Manilla to the port of employment and return, and to give covered seamen a per diem while in transport of U.S. $7.00 per day per licensed crewmember and U.S. $3.00 per non-licensed crewmember...."

Fifth, Article XI provides for a monthly longevity wage bonus for seamen who have worked continuously on Trans-Phil contracts for two or more years. Finally, Article XXV provides that seamen who are not taken aboard the Kiso, but are placed on "standby" in Manilla or a foreign port shall be paid fifty percent of their basic monthly wage for the period during which they are on standby.

In addition to the above terms setting the rate of compensation, the 1989 CBA establishes grievance arbitration procedures covering disputes under the contract. The two contracts signed at Trans-Phil also set the term of employment at ten months.

C. Conduct Aboard Ship.

For the purposes of this motion, it is undisputed that plaintiffs were paid the lower wage stated in their Embarkation Orders, not the wage rate uniformly called for by the 1989 CBA, the two Trans-Phil contracts, the OEC, and the shipboard articles. It is also undisputed that the in furtherance of defendants' decision to pay the lower rate, the officers and managers of the Kiso maintained two sets of books. At the end of each pay period plaintiffs executed two receipts, one real receipt showing payments based on a base pay rate of $400.00 per month, and one false receipt showing payments based on the rate of $821.00 per month as called for in the 1989 CBA. The receipts were then recorded in separate books. Plaintiffs allege that this practice of "double booking" is widely employed by defendant NYK, which owns many vessels.

Defendants note that plaintiffs cooperated in this double booking arrangement, and never complained or requested the higher wage. Plaintiffs assert that their cooperation was the result of economic duress. In particular, plaintiffs assert that the officers of the Kiso told plaintiffs that if they did not cooperate they would be blacklisted in the Philippines and would not work again. In support of this allegation, plaintiffs have filed a memorandum allegedly circulated by defendants after the arrest of the Kiso in San Francisco. The memorandum is entitled "WATCHLIST" and was circulated to manning agencies in Manilla. The memorandum identifies nineteen seamen, all plaintiffs in this action, and explains that all "have been dismissed/repatriated for ITF INVOLVEMENT WHILE ONBOARD M/S KISO." (Emphasis original). Defendants deny drafting or circulating this memorandum.

The 1989 CBA expired on April 9, 1990. Prior to this date, NYK entered into negotiations with AMOSUP. These negotiations resulted in an new Collective Bargaining Agreement (the "1990 CBA") which became affective on April 9, 1990. The 1990 CBA deviated from the terms of the standard ITF contract, and lowered the base pay rate for AMOSUP members to $360.00 per month.

However, the 1990 CBA also included a so-called savings clause which provides that "any seafarer enjoying terms and conditions which are taken as a whole, recognized by the ITF as more favorable to the seafarer, shall continue to enjoy such terms and conditions" under the 1990 CBA. Documents submitted by defendants indicate that AMOSUP agreed to the lower pay rate in the 1990 CBA "on the grounds that the previous agreements ie. the 1989 CBA were completed in full and the crewmembers concerned were signed off."2 It is undisputed that plaintiffs' ten month term of employment was not completed in full, and that plaintiffs were not signed off, in April of 1990.

The 1990 CBA also substantially reiterates the grievance and arbitration rules of the 1989 CBA.

On April 9, 1990, the Kiso was at sea. Nonetheless, on that day defendants presented plaintiffs with new shipboard articles and asked each plaintiff to re-sign. The wage provisions of the articles were blank at the time of signing. The blanks were later filled in by officers of the Kiso to state the lower pay rate established by the 1990 CBA.

Plaintiffs state at the time they signed the new articles they did not know the terms of the 1990 CBA. Defendants do not concede plaintiffs knowledge or lack of knowledge. However, defendants have submitted no evidence indicating that plaintiffs knew of the 1990 CBA or its lower wage terms.

D. The First Attempted Arrest Of The Kiso And The...

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