Su v. M/V SOUTHERN ASTER

• Decision Date: 10 May 1990
• Docket Number: Civ. No. 90-165-MA.
• Citation: 767 F. Supp. 205,1990 AMC 1217
• Parties: I Hyeon SU, et al., Plaintiffs, v. M/V SOUTHERN ASTER, In Rem, and Southern Aster Navigation, S.A., Defendants.
• Court: U.S. District Court — District of Oregon

767 F. Supp. 205

1990 AMC 1217

I Hyeon SU, et al., Plaintiffs, v. M/V SOUTHERN ASTER, In Rem, and Southern Aster Navigation, S.A., Defendants.

Civ. No. 90-165-MA.

United States District Court, D. Oregon.

February 28, 1990.

On Reconsideration May 10, 1990.

Richard J. Dodson, Thomas E. Richard, Baton Rouge, La., John Buehler, Bullivant, Houser, Bailey, Pendergrass & Hoffman, Portland, Or., for plaintiffs.

Paul N. Wonacott, Wood, Tatum, Mosser, Brooke & Landis, Portland, Or., for defendants.

OPINION

MARSH, District Judge.

Plaintiffs are twenty former crew members of the M/V SOUTHERN ASTER and the Federated Korean's Seamen's Union (FKSU). All plaintiffs are citizens of Korea. Plaintiffs seek to recover back wages and penalties pursuant to 46 U.S.C. § 10313 as well as compensatory and punitive damages for alleged fraudulent labor practices. On February 21, 1990, plaintiffs filed a complaint with this court and the Southern Aster was arrested at the Port of Coos Bay by United States Marshals. On February 23, 1990, an expedited hearing was held at which time I set the amount of the bond to be posted in order to secure release of the vessel at $500,000. The following constitutes a written formalization of my oral rulings and conclusions of law.

This action originally came before me on defendants' motion to dismiss plaintiffs' wage claims for lack of jurisdiction pursuant to Fed.R.Civ.P. 12(b)(1) and their motion to vacate the arrest of the M/V Southern Aster. At the first expedited hearing held on February 22, 1990, I denied defendants' motion to dismiss for lack of subject matter jurisdiction. I found that the cases relied upon by defendants may have supported a motion to dismiss for failure to state a claim under Fed.R.Civ.P. 12(b)(6), but they did not support defendants' contention that this court was without subject matter jurisdiction to hear the wage claims of foreign seamen under general maritime law. See Cuevas v. Reading and Bates Corp., 770 F.2d 1371, 1380 (5th Cir.1985)¹ (court discusses applicability of former section 46 U.S.C. § 10313 to foreign seamen's claims, but does not address threshold jurisdiction issue); and Monteiro v. Sociedad Maritima San Nicolas, S.A., 280 F.2d 568, 574 (2nd Cir.), cert. denied, 364 U.S. 915, 81 S.Ct. 272, 5 L.Ed.2d 228 (1960) (same).

At the end of this hearing I directed the parties to address the issue of setting a bond to release the vessel pursuant to Admiralty Rule E(5)(a). The parties stipulated that the value of the vessel was $10 million and thus the maximum amount allowable under Rule E(5). Thereafter, plaintiffs submitted a memoranda in which they argued that they were entitled to a bond for the full value of the vessel as their claims for back pay, penalty wages, and compensatory and punitive damages exceeded $10 million.² Defendants indicated a willingness to agree to a bond of $500,000 to cover claims for back wages under general maritime law, but argued that plaintiffs had failed to state a claim for penalty wages under section 10313(g). I indicated to the parties that I would not consider plaintiffs' claims for compensatory or punitive damages based upon my earlier ruling on the identical issue in Jose, et al. v. M/V Fir Grove, Civ. No. 90-6028-MA (February 7, 1990) (oral ruling denying inclusion of plaintiffs' fraud damages within bond amount under Rule E(5)(a)).

Rule E(5)(a) provides that the amount of the bond set shall be up to two times plaintiffs' claim "fairly stated." Section 10313(i) provides that the section will apply only to "seamen on a foreign vessel when in a harbor of the United States." Thus, the issue presented before me in this case was whether foreign seamen, discharged from their foreign vessel in a foreign port in May of 1988, could bring a claim for penalty wages under section 10313 against the owner of a foreign vessel.

On February 23, 1990, I held an additional hearing to set the amount of the bond. After reviewing the memoranda and cases cited by both parties and hearing additional arguments regarding plaintiffs' basis for claiming penalty wages under section 10313(g), I determined that plaintiffs had failed to state a claim for penalty wages. In reaching this conclusion, I found that each of the cases relied upon by plaintiffs was distinguishable in several material respects. First, in Henry v. S/S Bermuda Star, 863 F.2d 1225 (5th Cir.1989), the Court addressed the issue of the dual application of Panamanian and United States Labor Law to the plaintiff-seamen's wage claims. The Court held that a repatriation deduction made in accordance with Panamanian law would not be considered illegal under the U.S. wage penalty provision (section 10313) although not expressly excluded under that statute. At footnote 70 of that opinion, the court expressly limited the application of its holding to the facts at hand and declined to hold that section 10313 was directly applicable to foreign seamen's wage claims. Similarly, in Thomas v. SS Santa Mercedes, 572 F.2d 1331 (9th Cir.1978) the Court addressed the issue of when the plaintiff was "discharged" for the purpose of determining the amount of the penalty claim, but did not address the threshold issue presented here regarding the nationality of the seamen or of the vessel owner and the plaintiff's entitlement to state a claim under section 10313.

Finally, I found that while Judge Dwyer's decision in Galon, et al. v. M/V HIRA II, et al., Civ No. 89-888, 1989 WL 211484 (order filed Oct. 27, 1989) and the decision in Ventiadis v. C.J. Thibadeaux & Company, 295 F.Supp. 135 (S.D.Tex.1968) lend some support to plaintiffs' argument, both decisions are distinguishable and unpersuasive. In Ventiadis, the trial judge gave great weight to the fact that the beneficial owner of the vessel was an American citizen and thus, the suit was between two foreign nationals "in name only." In HIRA II, Judge Dwyer concluded, without discussion, that the penalty wage claims of foreign seamen could be included within the release bond based upon Henry and Thomas, discussed above. Because I find that the holdings in Henry and Thomas are not dispositive of the issue presented here, I do not agree with Judge Dwyer's conclusion and decline to adopt it.

Based on the foregoing, I concluded that the bond should be set at $500,000, or roughly two times the plaintiffs' claim for back wages "fairly stated." I found that doubling was necessary to account for costs and time spent in litigation. Based upon defendants' submission of a letter of credit and plaintiffs' stipulation as to the adequacy of the security which will bear interest at a rate of 6%, I signed an order releasing the vessel immediately following the hearing.

ON RECONSIDERATION

Plaintiffs are former crew members of the M/V SOUTHERN ASTER and the Federated Korean's Seamen's Union (FKSU). Plaintiffs seek to recover back wages and penalties pursuant to 46 U.S.C. § 10313 as well as compensatory and punitive damages for alleged fraudulent labor practices. On February 23, 1990, I granted defendant's motion to dismiss plaintiffs' penalty wage claims upon argument and without opinion due to the expedited nature of the hearing. On April 23, 1990, I granted plaintiffs' motion for reconsideration of my prior order because of the time constraints and plaintiffs' submission of additional authorities. In addition, defendant moves to dismiss this action based upon the doctrine of forum non conveniens and plaintiff moves to consolidate this case with Munoz v. M/V SOUTHERN ASTER, Civ. No. 90-122-MA. For the reasons that follow, my prior ruling dismissing plaintiffs' claims for penalty wages pursuant to Fed.R.Civ.P. 12(b)(6) is affirmed, defendant's motion to dismiss on the basis of forum non conveniens is granted and plaintiffs' motion to consolidate is denied as moot.

BACKGROUND

On February 21, 1990 the Southern Aster was arrested at the Port of Coos Bay by United States Marshals. On February 22 and 23, 1990, I conducted an expedited hearing to set the amount of bond necessary to release the vessel. In addition, I denied defendants' motion for dismiss for lack of jurisdiction pursuant to Fed.R. Civ.P. 12(b)(1), but granted its motion to the extent it sought to dismiss plaintiffs' claims for penalty wages under § 10313.

At the hearing on February 23, 1990, and in a follow-up opinion issued on February 28, 1990, I found that plaintiffs claims for penalty wages were not "fairly stated" and thus could not be included within the amount of the bond. In addition, I determined that plaintiffs had failed to state a claim for penalty wages under § 10313. Based upon the cases submitted by both parties, I found that there was no legal support for plaintiffs' contention that foreign seamen, discharged from a foreign vessel, in a foreign port were entitled to the protection of the U.S. Shipping Act.

DISCUSSION

1. Reconsideration of the Applicability of Penalty Wages

The United States Shipping Act, 46 U.S.C. § 10313, provides in relevant part:

(f) At the end of a voyage, the master shall pay each seaman the balance of wages due the seaman within 24 hours after the cargo has been discharged or within 4 days after the seaman is discharged, whichever is earlier. When a seaman is discharged and final payment of wages is delayed for the period permitted by this subsection, the seaman is entitled at the time of discharge to one-third of the wages due the seaman.

(g) When payment is not made as provided under subsection (f) of this section without sufficient cause, the master or owner shall pay to the seaman 2 days' wages for each day payment is delayed.

* * * * * *

(i) This section applies to a seaman on a foreign vessel when in a harbor of the United States. The courts are available to the seaman for the enforcement of this section.

Plaintiffs are all Korean citizens. The Southern Aster is owned by a Panamanian company, flies the Panamanian flag and its beneficial owner is...