US v. M/V SANTA CLARA I

• Decision Date: 05 August 1994
• Docket Number: Civ. A. No. 2:92-0389-18.
• Citation: 859 F. Supp. 980
• Court: U.S. District Court — District of South Carolina
• Parties: UNITED STATES of America Plaintiff, v. M/V SANTA CLARA I, its engines, boilers, machinery, masts, boats, anchors, cables, chains, rigging, tackle, apparel, furniture, capstans, outfit, tools, pumps, pumping and other equipment, etc., in rem, and Kyriakopoulos Internacional, S.A. and Empresa Naviera Santa, S.A., and Juan Alvarez, in personam, Defendants, KYRIAKOPOULOS INTERNACIONAL, S.A. and Empresa Naviera Santa, Third-Party Plaintiffs, v. COMPANIA MINERA EL INDIO; Lac Minerals; Chemical Specialties, Inc., Degesch De Chile, Ltda.; and Degesch America, Inc. Third-Party Defendants, DEGESCH DE CHILE, LTDA. Third-Party Plaintiff, v. A. HARDRODT CHILE, S.A., Third-Party Defendant.

859 F. Supp. 980

UNITED STATES of America Plaintiff, v. M/V SANTA CLARA I, its engines, boilers, machinery, masts, boats, anchors, cables, chains, rigging, tackle, apparel, furniture, capstans, outfit, tools, pumps, pumping and other equipment, etc., in rem, and Kyriakopoulos Internacional, S.A. and Empresa Naviera Santa, S.A., and Juan Alvarez, in personam, Defendants, KYRIAKOPOULOS INTERNACIONAL, S.A. and Empresa Naviera Santa, Third-Party Plaintiffs, v. COMPANIA MINERA EL INDIO; Lac Minerals; Chemical Specialties, Inc., Degesch De Chile, Ltda.; and Degesch America, Inc. Third-Party Defendants, DEGESCH DE CHILE, LTDA. Third-Party Plaintiff, v. A. HARDRODT CHILE, S.A., Third-Party Defendant.

Civ. A. No. 2:92-0389-18.

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

August 5, 1994.

COPYRIGHT MATERIAL OMITTED

Ben A. Hagood, Jr., U.S. Attys. Office, Charleston, SC, Eileen T. McDonough, Environmental Defense Section Environmental & Natural Resources Div., Washington, DC, Michael J. Devine, Arthur J. Volkle, Jr., Richard T. Buckingham, U.S. Dept. of Justice, Torts Branch, Civ. Div., Washington, DC, for plaintiffs.

Gordon D. Schreck, Charleston, SC, Brian D. Starer, New York City, Douglas Manning Muller, Charleston, SC, Charles B. Anderson, New York City, for defendants.

ORDER

NORTON, District Judge.

I. BACKGROUND

The action with which this order is concerned is a fourth-party action for indemnity, both contractual and equitable, brought by Degesch De Chile, Ltda., (hereinafter "Degesch Chile") against A. Hardrodt Chile, S.A., (hereinafter "Hardrodt") in which Degesch Chile is seeking to recover all damages recovered against it by Defendants and Third-Party Plaintiffs, Kyriakopoulos Internacional, S.A., (hereinafter "Kyriakopoulos") and Empresa Naviera Santa, S.A., (hereinafter "Empresa"), or Third-Party Defendant, Degesch America, Inc., (hereinafter "Degesch America").¹

The main action was commenced by Plaintiff, United States of America, against Defendants, Kyriakopoulos, Empresa, Juan Alvarez and the M/V Santa Clara I, seeking recovery of civil penalties and damages for the release of hazardous substances into the environment. Kyriakopoulos and Empresa have in turn brought a third-party action against Third-Party Defendants, Compania Minera El Indio (hereinafter "Minera"), LAC Minerals (hereinafter "LAC"), Chemical Specialties, Inc., (hereinafter "Chemical"), Degesch Chile and Degesch America, seeking indemnification.

This matter is now before the court on Hardrodt's Motion to Dismiss Degesch Chile's Complaint against it pursuant to FED. R.CIV.P. 12(b)(2) for lack of personal jurisdiction. A hearing was held on this matter on June 15, 1994.

II. FACTS

Hardrodt is a Chilean corporation principally engaged in the business of freight forwarding.² On November 25, 1991, Degesch Chile retained Hardrodt to process the transport of 1,800 net kilograms of magnesium phosphide to Baltimore, Maryland. In connection therewith, Degesch Chile supplied Hardrodt with several documents needed to process the transport of the magnesium phosphide.

Hardrodt forwarded the documents to the local Chilean customs agent, Mr. Aquiles Rodriguez, who prepared and drew up the bill of lading. Mr. Rodriguez sent the bill of lading to the local Chilean carrier's ship agent, Empresa, who stamped, dated, numbered, signed and inserted the freight value onto the same. Empresa then forwarded the bill of lading to Degesch Chile against payment of the freight.³

The magnesium phosphide was shipped to Baltimore, Maryland, from Valparaiso, Chile, aboard the M/V Santa Clara I. The magnesium phosphide was stored in ten metal drums which were stored break bulk in the M/V Santa Clara I's number one upper tween deck.

On January 4, 1992, the M/V Santa Clara I encountered heavy weather off the coast of New Jersey while proceeding southbound from Elizabeth City, New Jersey, to Baltimore, Maryland. As a consequence, the M/V Santa Clara I lost containers and other cargo into the sea. She also suffered stowage collapse of sundry cargo within her holds, including some of the drums of magnesium phosphide.

Subsequently, on January 4th and 5th, 1992, the drums of magnesium phosphide were off-loaded in Baltimore, Maryland. However, as a result of the damage some of the drums had suffered, approximately 800 pounds of magnesium phosphide had spilled into the hold of the M/V Santa Clara I. On January 8, 1992, while the M/V Santa Clara I was berthed in Charleston, South Carolina, the 800 pounds of loose magnesium phosphide were discovered and identified. The United States then had the magnesium phosphide removed from the M/V Santa Clara I's hold.

The United States brought this action against the M/V Santa Clara I and her owners and charterers seeking to recover, among other things, the cost of the clean up.⁴ Kyriakopoulos and Empresa, in turn, brought a third party action against Minera, LAC, Chemical, Degesch Chile and Degesch America for indemnity, alleging they were responsible for the release of the arsenic and magnesium phosphide.⁵ Degesch Chile brought this action against Hardrodt seeking indemnification, alleging in substance that Hardrodt failed to properly note on the bill of lading that magnesium phosphide is a hazardous substance and that had it done so the magnesium phosphide would have been stored in a different manner and in a different location on the M/V Santa Clara I which would have prevented damage to the drums.

III. ANALYSIS

A. PERSONAL JURISDICTION

The determination of whether a court may exercise personal jurisdiction over a non-resident defendant involves a two-step analysis.⁶Fed. Ins. Co. v. Lake Shore, Inc., 886 F.2d 654, 657 (4th Cir.1989); White, 300 S.C. 241, 387 S.E.2d 260, 262. First, the court must decide if it has the power to exercise personal jurisdiction by determining whether the defendant's conduct falls within the parameters of the South Carolina Long Arm Statute. Lake Shore, 886 F.2d at 657 n. 2.⁷ Second, the court must determine whether the exercise of personal jurisdiction comports with federal due process standards. Id. Since Hardrodt's conduct does not fall within the ambit of the South Carolina Long Arm Statute, and since the exercise of personal jurisdiction over it would offend federal due process, Degesch Chile's Complaint against Hardrodt must be dismissed.

1. South Carolina Long Arm Statute

The South Carolina Long Arm Statute⁸ authorizes the exercise of personal jurisdiction over a non-resident defendant,

(1) ... who acts directly or by an agent as to a cause of action arising from the person's

(a) transacting any business in this State;

(b) contracting to supply services or things in the State;

(c) commission of a tortious act in whole or in part in this State;

(d) causing tortious injury or death in this State by an act or omission outside this State if he regularly does or solicits business, or engages in any other persistent course of conduct, or derives substantial revenue from goods used or consumed or services rendered, in this State; or

(e) having an interest in, using, or possessing real property in this State; or

(f) contracting to insure any person, property or risk located within this State at the time of contracting; or

(g) entry into a contract to be performed in whole or in part by either party in this State; or

(h) production, manufacture, or distribution of goods with the reasonable expectation that those goods are to be used or consumed in this State and are so used or consumed.

(2) When jurisdiction over a person is based solely upon this section, only a cause of action arising from acts enumerated in this section may be asserted against him....

Id. at § 36-2-803.

A court may exercise personal jurisdiction over a non-resident defendant "`only in suits growing out of acts which have created contacts with ... South Carolina, however, limited or transient such contacts may be.'" Jenrette v. Seaboard Coast Line R.R. Co., 308 F.Supp. 642, 644 (D.S.C.1969) (citation omitted) (emphasis in original). Unless the non-resident defendant's conduct out of which the suit arises falls within one of the Long Arm Statute's enumerated categories, the court is without authority to exercise personal jurisdiction. White, 387 S.E.2d at 262-63.⁹

None of Hardrodt's activities complained of in Degesch Chile's Complaint gives rise to personal jurisdiction under the South Carolina Long Arm Statute. Hence, Degesch Chile's Complaint against Hardrodt must be dismissed.

Hardrodt's conduct does not fall within sections 36-2-803(e), (f) or (h), as its alleged actions do not relate to an interest in, use of or possession of real property, do not relate to an insurance contract and do not relate to the production, manufacture or distribution of goods.¹⁰

Hardrodt has not transacted any business in South Carolina during the past ten years and has no record of ever having done so. Therefore, section 36-2-803(a) is, likewise, inapplicable.

Though Hardrodt did contract with Degesch Chile to process the transport of the magnesium phosphide, its actions are also outside of sections 36-2-803(b) and (g). All of the services Hardrodt agreed to provide Degesch Chile were to be performed and actually were performed entirely within Chile. In fact, Hardrodt had performed all acts it had agreed to perform prior to the time the magnesium phosphide left Chile. Moreover, the contract between Hardrodt and Degesch Chile contemplated that the magnesium phosphide would be shipped from Chile to Maryland. Neither contemplated that any of the magnesium phosphide would end up in South Carolina. Accordingly, having failed to show, or even allege, that Hardrodt contracted to supply services or things within South Carolina or that Hardrodt entered into a contract to be performed in whole or in part by either it or Degesch Chile in South Carolina, the court lacks the power to exert personal jurisdiction over Hardrodt...