McClelland Engineers, Inc. v. Munusamy

• Decision Date: 24 March 1986
• Docket Number: No. 84-2549,84-2549
• Citation: 784 F.2d 1313
• Parties: McCLELLAND ENGINEERS, INC., et al., Plaintiffs-Appellants, v. Muigawah MUNUSAMY, et al., Defendants-Appellees.
• Court: U.S. Court of Appeals — Fifth Circuit

Page 1313

784 F.2d 1313

McCLELLAND ENGINEERS, INC., et al., Plaintiffs-Appellants, v. Muigawah MUNUSAMY, et al., Defendants-Appellees.

No. 84-2549.

United States Court of Appeals, Fifth Circuit.

March 24, 1986.

Tobi A. Tabor, James Patrick Cooney, Houston, Tex., for Oceaneering Intern. and McClelland Engineers.

G. Byron Sims, Houston, Tex., for Arabian American Oil and Crosby Offshore.

Marion McDaniel, Robert L. Klawetter, Houston, Tex., for Global Marine.

Benton Musslewhite, Richard Schechter, G. Robert Friedman, Paul Wesley Klinger Jr., Houston, Tex., for defendants-appellees.

Appeal from the United States District Court for the Eastern District of Texas.

Before JOLLY, and HILL, Circuit Judges, and HUNTER, ^* District Judge.

E. GRADY JOLLY, Circuit Judge:

We review the district court's denial of a motion to dismiss three consolidated cases on the grounds of forum non conveniens. The district court found that the choice of law determination in this case, usually a prerequisite to deciding a forum non conveniens motion, could not be rendered until after evidence had been admitted at trial. The district court thus delayed the choice of law determination and, after reviewing the factors delineated by the Supreme Court in Gulf Oil Co. v. Gilbert, 330 U.S. 501, 67 S.Ct. 839, 91 L.Ed. 1055 (1947), denied the forum non conveniens motion. Because we find that the district court failed to follow precedent of both the Supreme Court and this court, we reverse the denial of the forum non conveniens motion as an abuse of discretion.

I.

Three aliens, Stephen Crow, Muigawah Munusamy, and William Picco, filed separate personal injury admiralty suits in district court. Crow, a citizen of New Zealand, was hired in New Zealand by the Brunei subsidiary of a United States company to work as a diver in Brunei. He was injured off Brunei while working aboard the PACIFIC PROTECTOR, a Panama-registered, diving-support, fire-fighting and rescue ship. On February 22, 1982, Crow brought suit under the Jones Act 46 U.S.C. Sec. 688, the general maritime law of the United States, the Death on the High Seas Act, 46 U.S.C. Sec. 761, and Texas state law against Oceaneering International, Inc., and Oceaneering International Brunei to recover damages. Munusamy, a citizen of Malaysia, was hired in Dubai by the Dubai subsidiary of a United States company to work as a driller's helper. He was injured in the Arabian Gulf while working on a drilling rig placed on a barge flying a Dubai flag. On October 28, 1981, Munusamy brought suit under the Jones Act, the general maritime law of the United States, the Death on the High Seas Act, and Texas state law against McClelland Engineers, Inc., McClelland Engineers, S.A., McClelland Engineers, S.A., BHD, and Arabian American Oil Co. to recover damages. Picco, a Canadian citizen, was hired in Canada by the Canadian subsidiary of a United States company to work as a roustabout. He was injured in Newfoundland on board the D/S GLOMAR ATLANTIC, a United States flag, mobile drilling-rig. On July 14, 1982, Picco also brought suit under the Jones Act, the general maritime law of the United States, the Death on the High Seas Act, and Texas state law against Global Marine Drilling Co. and Crosbie Offshores Services, Ltd. to recover damages.

After initial discovery was completed, the three sets of defendants (collectively McClelland) filed motions to dismiss the actions under the doctrine of forum non conveniens. The district court consolidated the three cases for purposes of deciding the forum non conveniens motions filed by McClelland. A threshold question for deciding the motions was which country's law would apply to each case. On January 30, 1984, the district court denied the motions and ruled that the choice-of-law question would be decided after all the evidence was presented at trial. Munusamy v. McClelland Engineers, Inc., 579 F.Supp. 149 (E.D.Tex.1984).

Since the district court denied the forum non conveniens motions after taking the unusual step of delaying the choice-of-law determination, McClelland asked the district court to certify its order for appeal to this court under 28 U.S.C. Sec. 1292(b). The district court denied the motion for certification on April 11, 1984. McClelland then filed for writ of mandamus, asking this court to require the district court either to enter judgment on grounds of forum non conveniens or, alternatively, to certify its order pursuant to 28 U.S.C. Sec. 1292(b). On July 20, 1984, this court denied the mandamus petition without prejudice, vacated the district court's order denying certification, and requested that the district court certify its order denying the forum non conveniens motions for appeal. In re McClelland Engineers, Inc., 742 F.2d 837 (5th Cir.1984).

On July 24, 1984, McClelland filed in the district court a motion for reconsideration of its earlier motion for certification. On July 30, the district court granted the motion for certification and on October 5, this court granted McClelland's application to take an interlocutory appeal. This court also denied the motions of the appellees (collectively Munusamy) for a stay of proceedings and for severance of the three cases on appeal.

II.

McClelland raises two related issues on appeal. ¹ First, McClelland contends that the district court erred in reserving the choice-of-law decision until after facts were presented at trial. Second, McClelland argues that the district court abused its discretion in denying the motions to dismiss on forum non conveniens grounds and asks this court to reverse the district court's denial of its motions and render a judgment ordering dismissal.

III.

A.

McClelland contends that the district court incorrectly reserved the choice-of-law decision "until the evidence is presented." McClelland maintains that the choice-of-law decision is a necessary first step in determining whether a case should be dismissed on the grounds of forum non conveniens, and that the district court's failure to resolve this issue constituted an incorrect application of the controlling authority within this circuit. McClelland thus asserts that the district court committed reversible error. We agree.

The law of forum non conveniens in this circuit is clear. Before deciding a motion to dismiss a case under the doctrine of forum non conveniens, a district court

should first ascertain whether American or foreign law governs the lawsuit. If American law applies, then the district court should normally retain jurisdiction and proceed with the case. If, however, foreign law does apply and the foreign forum is accessible, then the district court should determine in which forum the case should be tried, and if it decides that the lawsuit should be tried in the foreign forum, then the court should decline to exercise jurisdiction over the case.

Vaz Borralho v. Keydril Co., 696 F.2d 379, 384 (5th Cir.1983). The district court should rely on the eight Lauritzen-Rhoditis factors developed by the Supreme Court in making its initial determination of whether United States or foreign law applies. See Hellenic Lines, Ltd. v. Rhoditis, 398 U.S. 306, 90 S.Ct. 1731, 26 L.Ed.2d 252 (1970); Lauritzen v. Larsen, 345 U.S. 571, 73 S.Ct. 921, 97 L.Ed. 1254 (1953). The eight factors laid out in Lauritzen-Rhoditis are: (1) the place of the wrongful act; (2) law of the flag; (3) allegiance or domicile of the injured; (4) the allegiance of the employer; (5) place of the contacts of employment; (6) inaccessibility of the foreign forum; (7) the law of that forum; (8) the base of operations. In cases in which the "vessel" is not a "true maritime vessel" but rather an "unconventional" vessel, such as a platform or a rig, this court has stated that the place of the wrongful act, the allegiance or domicile of the injured, and the place of contract take on "added significance." Chiazor v. Transworld Drilling Co., 648 F.2d 1015 (5th Cir.1981), cert. denied, 455 U.S. 1019, 102 S.Ct. 1714, 72 L.Ed.2d 136 (1982). If, applying these factors, the court concludes that foreign law applies to the action, the court should determine whether the remaining factors, set out in Gulf Oil Corp. v. Gilbert, 330 U.S. 501, 67 S.Ct. 839 favor dismissal or retention of the case. While a district court's choice of law determination is subject to de novo review by this court, Vaz Borralho, 696 F.2d at 384, "the forum non conveniens determination is committed to the sound discretion of the trial court." Piper Aircraft Co. v. Reyno, 454 U.S. 235, 257, 102 S.Ct. 252, 266, 70 L.Ed.2d 419 (1981). This court has repeatedly affirmed these principles. See, e.g., Cuevas v. Reading & Bates Corp., 770 F.2d 1371 (5th Cir.1985); Koke v. Phillips Petroleum Co., 730 F.2d 211, 218 (5th Cir.1984); De Oliveira v. Delta Marine Drilling Co., 707 F.2d 843, 845 (5th Cir.1983); Fisher v. Agios Nicolaos V, 628 F.2d 308, 315 (5th Cir.1980), cert. denied, sub nom. Valmas Brothers Shipping, S.A. v. Fisher, 454 U.S. 816, 102 S.Ct. 92, 70 L.Ed.2d 84 (1981).

The district court in this case chose a different route. The district court viewed the Lauritzen-Rhoditis factors "as examples supporting a rule of law, not as reasons for making a choice of law." Munusamy, 479 F.Supp. at 153 (emphasis in original). Finding the "relative significances of the 'factors' [to be] almost infinitely variable," the court "fear[ed] that the factors were sufficiently obscure or variable to justify any judicial conclusion." Id.

After thus deciding that decisions of the Supreme Court and this court were "sufficiently obscure" to be non-controlling, the district court set forth its own unprecedented analysis of the law. This court, when denying the writ of mandamus and requesting the district court to certify its order for appeal, summed up the district court's analysis of the applicable law as follows:

As we understand that analysis, it commences with a 1936 Treaty to which the United States is a...