Penrod Drilling Company v. Johnson

Decision Date14 August 1969
Docket NumberNo. 24662.,24662.
Citation414 F.2d 1217
PartiesPENROD DRILLING COMPANY, Appellant, v. Sam H. JOHNSON and James L. Starnes, Appellees.
CourtU.S. Court of Appeals — Fifth Circuit

Wilton H. Williams, Jr., Shreveport, La., John M. Smith, of Roberts, Smith, Roberts & Parker, Longview, Tex., Joseph W. Milner, of Blanchard, Walker, O'Quin and Roberts, Shreveport, La., for appellant.

Scott Baldwin, Jones, Jones & Baldwin, Marshall, Tex., Joseph D. Jamail, Houston, Tex., Tully Flory, III, Mount Pleasant, Tex., of counsel, for appellees.

Before JOHN R. BROWN, Chief Judge, and BELL and THORNBERRY, Circuit Judges.

JOHN R. BROWN, Chief Judge:

This case, simple in setting but not so easy of determination, is before us as an interlocutory appeal, 28 U.S.C.A. § 1292(b). The appeal presents the single issue of whether a partnership may be sued under the special venue provisions of the Jones Act1 in a district in which the partnership is doing business but in which neither the partnership's principal office is located nor any partner resides. It splices the main brace to state it in more realistic terms. The question is whether the cherished ward of the admiralty — a seaman, whether salt water, pure and unadulterated or of a Sieracki-Ryan-Yaka variety — who sustains an injury on navigable waters within or off-shore of Louisiana, must, in making a Jones Act claim against the multimillion dollar shipowner-employer whose extensive operations are widely scattered over the nation, the high seas and perhaps the terrestrial globe,2 pursue this employer in Dallas, Texas, where the dream of oceangoing vessels up the Trinity is an enticing but unrealized community hope and where the admiralty Judge must dispense his justice not from any juridical quarterdeck but from a non-nautical bench high and dry above maritime waters.

The District Court held that venue in the Eastern District (in addition to the Northern District — Dallas) was proper.3 We affirm.

The Seamen4 sued Shipowner in the Eastern District of Texas for damages under the Jones Act, 46 U.S.C.A. § 688. Shipowner, a partnership whose partners reside in Dallas, Texas, and whose principal office is in Dallas (see notes 2, 3, supra), filed a motion seeking to have the action either dismissed or transferred to the Northern District of Texas. The motion was denied by the District Judge. This Court granted a § 1292(b) interlocutory appeal from that ruling, which appeared to be on a controlling question of law.

The special venue provision of the Jones Act (note 1, supra) reads:

"Jurisdiction in such actions shall be under the court of the district in which the defendant employer resides or in which his principal office is located."

It has long been settled that even though this provision reads in jurisdictional terms, it refers to venue only. Pure Oil Co. v. Suarez, 1966, 384 U.S. 202, 86 S.Ct. 1394, 16 L.Ed.2d 474, 1966 A. M.C. 1117; Panama R. R. Co. v. Johnson, 1924, 264 U.S. 375, 44 S.Ct. 391, 68 L.Ed. 748. As this statute was originally enacted and interpreted, "residence" for a partnership would most certainly have been limited to the residences of the individual partners. McCullough v. Jannson, 9 Cir., 1923, 292 F. 377. But Seamen contend that the expanded concept of corporate residence for venue purposes, as set forth in 28 U.S. C.A. § 1391(c)5, is applicable to this large business organization sued as a shipowner under the Jones Act.

At the outset, certain things warrant emphasis. First, there is no question of subject-matter jurisdiction which rests on the Jones Act, a federal statute. Second, on jurisdiction over the person there is no doubt that Shipowner had sufficient contracts with the Eastern District to be amenable to in personam process under F.R.Civ.P. 4(d) (3).6 Last, for a federal statutory claim, F.R. Civ.P. 17(b) (1),7 accords partnerships express capacity to be sued. Of greatest importance is the fact that jurisdiction is in no sense in question, so this case does not involve the problem confronting the Supreme Court in United Steelworkers of America v. Bouligny, 1965, 382 U. S. 145, 86 S.Ct. 272, 15 L.Ed.2d 217. There the Court held that for purposes of diversity jurisdiction an unincorporated association was not a citizen and that its citizenship was that of its individual members.

The problem comes down to the purely procedural question whether a multistate unincorporated business organization "resides" or has a "residence" for Jones Act venue purposes in a district in which it is doing business, but which is not the location of its principal office or the place where its owner-partners live. We answer this question in the affirmative. Since in that answer we draw directly on the Supreme Court's holding that corporate venue standards apply to give meaning to "residence" or similar concepts concerning unincorporated associations, we are led to the subsidiary question whether for venue purposes — we repeat, venue — there can be any recognizable difference between the unincorporated partnership and the unincorporated association. That we answer in the negative. In this binary world, that plus and minus adds up to affirmance.

A good place to start is Pure Oil Co. v. Suarez, supra, because it deals with this very part of the Jones Act. In that case the Supreme Court held8 that in a suit against a corporation under the Jones Act, venue was proper in a state that was neither the state of incorporation nor the place of the principal office, but in which the corporation was doing business. This inverted form of statutory interpretation, reading the general provision of § 1391(c) into the specific provision of the Jones Act was thought justifiable in light of the liberalizing policy of § 1391(c) and the generality of the language used. Thus the word "residence" as used in the Jones Act was thought to do nothing more than refer to general doctrines of venue rules, which might change from time to time. The change might come from legislative or judicial action or a combination of both.

But the quest cannot end there. For a partnership is not a corporation, even though persuasive arguments may be made that the entity theory of partnerships has now so engulfed the aggregate theory as to make nice distinctions between the two forms of business associations almost meaningless.9 But while the Suarez Court did not decide our specific question, it did accomplish a number of things. It established the principle that venue provisions of the Jones Act should receive treatment consistent with the liberal application of that legislation. Next, it recognized that the legislative addition of § 1391(c) was made "to bring venue law in tune with modern concepts of corporate operations." 384 U.S. at 204, 86 S.Ct. at 1395, 16 L. Ed.2d at 476. To this end the change was held to be applicable not only to the general diversity and federal-question venue provisions, § 1391(a) and (b), but also "to all venue statutes using residence as a criterion, at least in the absence of contrary restrictive indications in any such statute." Id. at 205, 86 S. Ct. at 1396, 16 L.Ed.2d at 476. On that score, the Court concluded that "there is nothing to the legislative history of the venue provision of the Jones Act to indicate that its framers meant to use `residence' as anything more than a referent to more general doctrines of venue rules, which might alter in the future. Id. at 205, 86 S.Ct. at 1396, 16 L.Ed.2d at 477 (footnotes omitted).

Perhaps with this liberal approach nothing more would have been needed to reach our result here. But we are spared the travail of speculating whether a small step by that Court would have meant a big leap for us unaided by any decision subsequent to Suarez for the recent case of Denver & R. G. W. R. R. v. Brotherhood of R. R. Trainmen, 1967, 387 U.S. 556, 87 S.Ct. 1746, 18 L.Ed.2d 954, affords an adequate gravitational basis. In that case the defendant was an unincorporated association — a labor union. The Court reaffirmed that for venue purposes the defendant should be suable as an entity and recognized that the critical factor was the residence of the entity, rather than the residence of the individual members of the association. Faced with the question of where that entity "resided", the Court then proceeded to hold for the first time that an unincorporated association should be analogized to a corporation. With that it applied to the assimilated "corporation" § 1391(c), which in 1948 brought in for corporate venue any district in which the corporation was "doing business."10 Until this decision the lower courts had been hopelessly divided on the question of where proper venue lay for an unincorporated association.11

The decision in the Denver case leads inevitably to the conclusion that if two seamen were suing an unincorporated association such as a labor union for injuries sustained in the operations of an excursion vessel owned and operated by the union as a shipowner, then venue under § 688 could properly be laid wherever that unincorporated-business-association-shipowner was doing business, for that would be one of its "residences" for venue purposes. But, is it much of a step from Denver's holding to a holding in the present case that this huge unincorporated business enterprise should likewise be treated as "residing" wherever "it is doing business"? That query leads to two further questions. First, is the holding in Denver to be broadly construed or is it to be limited to labor unions? Second, for venue purposes, are there any significant differences between a partnership and an unincorporated association?

As to the first — the scope of the holding in Denverwe perceive no great difficulty. Venue is primarily a question of convenience for litigants and witnesses, Denver & R. G. W. R. R. Co. v. Brotherhood of R. R. Trainmen, 1967, 387 U.S. at 560, 87 S.Ct. at 1748, 18 L. Ed.2d at 958, and venue provisions should be treated in...

To continue reading

Request your trial
45 cases
  • Murphy v. Pricewaterhousecoopers, Llp
    • United States
    • United States District Courts. United States District Court (Columbia)
    • September 27, 2004
    ...See, e.g., EEOC v. St. Francis Xavier Parochial School, 77 F.Supp.2d 71, 76-77 (D.D.C.1999); see also Penrod Drilling Co. v. Johnson, 414 F.2d 1217, 1222 (5th Cir.1969). "[A] division of a corporation does operate with a charter — the charter of the larger corporation." St. Francis, 77 F.Su......
  • Committee for Idaho's High Desert v. Yost, CV 94-0089-S-LMB.
    • United States
    • United States District Courts. 9th Circuit. District of Idaho
    • April 6, 1995
    ...definitions of "unincorporated association" for purposes of the Rule 17(b)(1)'s federal law exception, see Penrod Drilling Co. v. Johnson, 414 F.2d 1217, 1222 (5th Cir.1969), cert. denied, 396 U.S. 1003, 90 S.Ct. 552, 24 L.Ed.2d 495 (1970); Delta Coal Program v. Libman, 554 F.Supp. 684, 687......
  • Kahane v. Carlson, 274
    • United States
    • United States Courts of Appeals. United States Court of Appeals (2nd Circuit)
    • November 26, 1975
    ...Engineers, 307 F.2d 21, 29 (2d Cir. 1962), cert. denied, 372 U.S. 954, 83 S.Ct. 949, 9 L.Ed.2d 978 (1963); Penrod Drilling Co. v. Johnson, 414 F.2d 1217 (5th Cir. 1969), cert. denied, 396 U.S. 1003, 90 S.Ct. 552, 24 L.Ed.2d 495 (1970). Domicile is usually the best measure of that convenienc......
  • Day v. Avery, 75-1744
    • United States
    • United States Courts of Appeals. United States Court of Appeals (District of Columbia)
    • April 25, 1977
    ...Co. v. Brotherhood of R.R. Trainmen, 387 U.S. 556, 560, 87 S.Ct. 1746, 1748-1749, 18 L.Ed.2d 954, 958 (1967); Penrod Drilling Co. v. Johnson, 414 F.2d 1217, 1221 (5 Cir. 1969), cert. denied, 396 U.S. 1003, 90 S.Ct. 552, 24 L.Ed.2d 495 26 Day v. Sidley & Austin, supra note 1, 394 F.Supp. at ......
  • Request a trial to view additional results

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT