de Reyes v. Marine Management and Consulting, Ltd.

• Decision Date: 09 September 1991
• Docket Number: No. 90-CC-2214,90-CC-2214
• Citation: 586 So.2d 103
• Parties: Gladis Ondina Aguilera de REYES, as Widow and Personal Representative of the Estate of Jorge Alberto Reyes, deceased v. MARINE MANAGEMENT AND CONSULTING, LTD., et al. 586 So.2d 103
• Court: Louisiana Supreme Court

Page 103

586 So.2d 103

Gladis Ondina Aguilera de REYES, as Widow and Personal Representative of the Estate of Jorge Alberto Reyes, deceased v. MARINE MANAGEMENT AND CONSULTING, LTD., et al.

No. 90-CC-2214.

586 So.2d 103

Supreme Court of Louisiana.

Sept. 9, 1991.

Rehearing Denied Oct. 10, 1991.

Bruce C. Waltzer, Paul S. Weindenfeld, New Orleans, for applicant.

Robert H. Murphy, Douglas L. Grundmeyer, William A. McLellan, Chaffe, McCall, Phillips, Toler & Sarpy, New Orleans, for respondents.

DENNIS, Justice.

The question presented is whether the Due Process Clause of the Fourteenth Amendment denies Louisiana courts personal jurisdiction over a non-resident ship management corporation, which maintained a corporate office in Louisiana out of which it continuously and systematically conducted a regular but limited part of its general business, in a suit indirectly related to but not arising out of its activities in the state.

Jorge Alberto Reyes, a Honduran seaman, was fatally asphyxiated while serving aboard the M/V BRASSIE in international waters off the coast of Oregon. His former spouse and mother of his two minor children, Gladis Ondina Aguilera de Reyes, a citizen of Honduras, brought this wrongful death action for herself and the children, under the general maritime law and the Jones Act, 46 U.S.C. Appx. Sec. 688.

Plaintiff named as defendant, among other parties, Wallem Shipmanagement, Ltd., a Hong Kong ship management corporation with its principal place of business in Hong Kong. By a contract of management with the owner of the M/V BRASSIE, Wallem had undertaken to employ officers and crew for the vessel and to perform all non-commercial management services necessary for the vessel, its officers and crew, including maintenance, repairs, supplies, and personnel services. Pursuant to its obligation as ship manager, Wallem employed Jorge Alberto Reyes to serve as a seaman and member of the crew of the M/V BRASSIE approximately six months prior to his fatal accident.

Wallem Shipmanagement provides world-wide ship management services to the owners of as many as 60 to 100 vessels operating in international trade around the globe. Wallem directed the performance of the bulk of its ship management services by electronic communications from its principal office in Hong Kong. However, it also stationed full time employees in regional corporate offices at strategic points around the globe to attend to regularly recurring matters that required personal, on-site inspection, analysis, estimation, negotiation, transaction or handling. These regional corporate offices were located in New Orleans, London, Ravenna (Italy) and Singapore. The New Orleans office was staffed by four employees and was in charge of such ship management needs in the waters around North and South America and the western hemisphere.

On several occasions Wallem engaged Marine Management and Consulting, Ltd. (MMC) to recruit Honduran seamen as members of crews aboard vessels in its charge. MMC is a Louisiana corporation, in the business of managing and crewing vessels, with its principal office in New Orleans. In fact, Wallem hired the decedent Reyes as a member of the M/V BRASSIE crew through the services of MMC. Moreover, at the time of the decedent's employment, MMC and Wallem maintained offices in the same small building in New Orleans. There were regular communications between the New Orleans offices of Wallem and MMC involving requests for assistance in employing Honduran seamen or in handling personal matters for Honduran seamen aboard Wallem vessels.

Defendant Wallem challenged the district court's in personam jurisdiction by declinatory exception. The district court overruled the exception. The court of appeal granted Wallem's application for a supervisory writ and, after rehearing, reversed the district court's ruling and sustained the exception as to in personam jurisdiction. 568 So.2d 128 (La.App. 4th Cir.1990). The appeals court concluded that Wallem had purposefully established sufficient minimum contacts with the forum state upon which to base general personal jurisdiction but that maintenance of the suit nevertheless would offend traditional notions of fair play and substantial justice under the two-part contacts-fairness analysis articulated by the United States Supreme Court. Asahi Metal Industry Co., Ltd. v. Superior Court of California, 480 U.S. 102, 107 S.Ct. 1026, 94 L.Ed.2d 92 (1987); Burger King Corporation v. Rudzewicz, 471 U.S. 462, 105 S.Ct. 2174, 85 L.Ed.2d 528 (1985); World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 100 S.Ct. 559, 62 L.Ed.2d 490 (1980). We granted certiorari. 571 So.2d 638 (La.1990).

BASIC PRINCIPLES OF PERSONAL JURISDICTION

Due process requires that in order to subject a nonresident defendant to a personal judgment, the defendant must have certain minimum contacts with the forum state such that the maintenance of the suit does not offend traditional notions of fair play and substantial justice. International Shoe Co. v. Washington, 326 U.S. 310, 320, 66 S.Ct. 154, 160, 90 L.Ed. 95 (1945). The rule of International Shoe has continued to remain viable and integral in due process analysis of the exercise of personal jurisdiction. See Asahi Metal Industry Co., supra; Burger King Corp., supra; Helicopteros Nacionales de Colombia, S.A. v. Hall, 466 U.S. 408, 104 S.Ct. 1868, 80 L.Ed.2d 404 (1984).

In interpreting the due process clause, the United States Supreme Court has recognized a distinction between two types of personal jurisdiction--"general" and "specific" jurisdiction. Burger King Corporation v. Rudzewicz, 471 U.S. at 473, n. 15, 105 S.Ct. at 2182, n. 15; Helicopteros, 466 U.S. at 414, 104 S.Ct. at 1872. "It has been said that when a State exercises personal jurisdiction over a defendant in a suit arising out of or related to the defendant's contacts with the forum, the State is exercising 'specific jurisdiction' over the defendant." Id., at n. 8. But when a State exercises personal jurisdiction over a defendant in a suit not arising out of or related to the defendant's contacts with the forum, the State has been said to be exercising "general jurisdiction" over the defendant. Id., at n. 9.

THE ISSUE PRESENTED

The single question presented for our review is whether the Due Process Clause denies Louisiana "general" personal jurisdiction in this case. The plaintiff relies solely on the theory of "general jurisdiction" to support the district court's exercise of personal jurisdiction over the non-resident defendant corporation, Wallem Shipmanagement, Ltd.

Defendant Wallem argues simply that maintenance of the suit would offend due process, implicitly conceding that institution of this action by long-arm service as per La.R.S. 13:3201 was effective if due process has been satisfied. See Superior Supply Co. v. Associated Pipe & Supply Co., 515 So.2d 790 (La.1987); Fryar v. Westside Habilitation Center, 479 So.2d 883 (La.1985); Clay v. Clay, 389 So.2d 31 (La.1979); and Adcock v. Surety Research and Investment Corp., 344 So.2d 969 (La.1977).

THE TWO-PART DUE PROCESS TEST

The vast majority of the Supreme Court's efforts to define and refine the limits of jurisdictional power have focused on the problem of "specific jurisdiction." This inquiry has evolved into a complex two-part test involving whether the nonresident defendant has established "minimum contacts" with the forum such that maintenance of the suit does not offend "traditional notions of fair play and substantial justice." The plaintiff argues that the court of appeal erred in applying the two-part test in the present case in which only "general" jurisdiction is at issue. Accordingly, an examination of the two-part test as it has developed in specific jurisdiction cases is in order before we determine whether it should be applied in a general jurisdiction case as well.

Where a forum seeks to assert specific jurisdiction over an out-of-state defendant who has not consented to suit there, the requirement of meaningful contacts is satisfied if the defendant has purposefully directed his activities at residents of the forum, Keeton v. Hustler Magazine, Inc., 465 U.S. 770, 104 S.Ct. 1473, 79 L.Ed.2d 790 (1984), and the litigation results from alleged injuries that arise out of or relate to those activities. Burger King Corp., supra; Helicopteros, supra. By requiring that a defendant must have purposefully availed himself of the privilege of conducting activities within the forum state, thus invoking the benefits and protections of its laws, the requirement ensures that he will not be haled into a jurisdiction solely as a result of a random, fortuitous or attenuated contact, or by the the unilateral activity of another party or a third person. Asahi Metal Industry Co., supra; Burger King Corp., 471 U.S. at 475, 105 S.Ct. at 2183; Keeton v. Hustler Magazine, supra; World-Wide Volkswagen Corp. v. Woodson, supra. Thus, where the defendant deliberately engaged in significant activities within a state, or has created continuing obligations between himself and residents of the forum, he manifestly has availed himself of the privilege of conducting business there, and because his activities are shielded by the benefits and protections of the forum's laws it is presumptively not unreasonable to require the defendant to submit to the burdens of litigation in that forum as well. Burnham v. Superior Court of California, 495 U.S. 604, 110 S.Ct. 2105, 2124-25, 109 L.Ed.2d 631 (1990) (Brennen, J., concurring); Asahi Metal Industry Co., 480 U.S. at 109, 107 S.Ct. at 1030; Burger King Corp., 471 U.S. at 476, 105 S.Ct. at 2184; World-Wide Volkswagen, 444 U.S. at 297, 100 S.Ct. at 567.

Once it has been decided that a defendant purposefully established such minimum contacts within the forum state, a presumption arises that jurisdiction is reasonable and the burden of proof and persuasion shifts to the defendant opposing jurisdiction to present ...