Villar v. Crowley Maritime Corp.
| Decision Date | 25 May 1993 |
| Docket Number | Nos. 92-7162,93-7036,s. 92-7162 |
| Citation | 990 F.2d 1489 |
| Parties | , 25 Fed.R.Serv.3d 1442 Nenita S. VILLAR, Etc., et al., Plaintiffs-Appellants, v. CROWLEY MARITIME CORPORATION, et al., Defendants-Appellees. Nenita S. VILLAR, Etc., et al., Plaintiffs, Gary Riebschlager and Benton Musslewhite, Appellants, v. CROWLEY MARITIME CORPORATION, et al., Defendants-Appellees. |
| Court | U.S. Court of Appeals — Fifth Circuit |
Benton Musslewhite, Gary Reibschlager, O'Quinn, Kerensky, McAninch, P.C., Houston, TX, for plaintiffs-appellants.
Jack L. Allbritton, Fulbright & Jaworski, Houston, TX, for Crowley Maritime Corp.
Appeals from the United States District Court for the Southern District of Texas.
Before JOHNSON, JOLLY, and DAVIS, Circuit Judges.
This suit is the third successive one that the plaintiffs have brought for the wrongful death of Renerio Z. Villar, a citizen of the Philippines. In the first two suits, California state and federal courts dismissed the plaintiffs' suit based on forum non conveniens. Furthermore, the Ninth Circuit held that no forum in the United States would be convenient. Yet, over ten years after filing the first suit, the plaintiffs brought the instant suit in Texas state court. The defendants removed the suit to federal court. The federal court dismissed the claims against the foreign defendants because the district court lacked personal jurisdiction over them. The district court then dismissed the claims against the remaining defendant because the district court was an inconvenient forum, 780 F.Supp. 1467. Finding that the plaintiffs' arguments are without merit, we affirm the decision of the district court.
In the 1970's, Villar worked in Saudi Arabia as a crew member aboard the tugboat BANNOCK. Villar worked for defendant SATOL, a Saudi Arabian corporation, under an employment contract executed in the Philippines. Villar's employment contract provided that if he was injured in the course of his employment, he could choose compensation under either the Philippine's worker's compensation law or the law of country in which the BANNOCK was registered. It turns out that the BANNOCK was registered under Panama's flag.
In March of 1977, Villar fell overboard and drowned. At that time, defendant GTO Corporation owned sixty percent of SATOL, Villar's employer. Defendant Crowley Maritime Corporation ("CMC"), in turn, owned one-third of GTO.
In 1980, Nenita S. Villar, Josephine Villar, Geraldo Villar, Reynaldo Villar, and Renerio Villar, Jr. (hereinafter "the Villars") sued SATOL, GTO, CMC, and other related corporations in the United States District Court for the Northern District of California. Four years later, the California district court dismissed the Villars' suit on grounds of forum non conveniens. The district court conditioned its dismissal on the defendants' agreement to waive all jurisdictional, venue, and statute of limitations defenses to any action the Villars brought in the Philippines in the next year. The Ninth Circuit affirmed the dismissal in February of 1986. Villar v. Crowley Maritime Corp., 782 F.2d 1478 (9th Cir.1986).
After the first dismissal, the Villars chose not to sue the defendants in the Philippines. Instead, the Villars filed an identical lawsuit in California state court. The California state court, like the California federal court, dismissed the Villars' suit based on the doctrine of forum non conveniens, and in December of 1990 the California Court of Appeals affirmed. The Villars still have not attempted to sue in the Philippines, Saudi Arabia, or Panama.
The persistent Villars have now sued the same defendants in Texas state court. One of the weary defendants, CMC, removed the proceeding to federal court based on diversity of citizenship. CMC is a Delaware corporation that is registered to do business in Texas and has its principal place of business in California. Although some of the defendant corporations are foreign corporations and, hence, not diverse with the Villars, CMC alleged that the Villars fraudulently joined the foreign corporations to defeat diversity jurisdiction. CMC further argued that the district court should ignore the citizenship of the foreign corporations because there was no way the district court could constitutionally exercise in personam jurisdiction over those defendants. CMC then moved to dismiss the claims against it on grounds of forum non conveniens, and the foreign corporations moved to dismiss the action against them because the district court lacked personal jurisdiction over them.
In response, the Villars moved to remand the proceeding to Texas state court because there was incomplete diversity of citizenship. The Villars urged the district court to consider their motion to remand before considering the defendants' motions to dismiss. In case the district court rejected their primary argument, the Villars made three alternative arguments. First, the Villars argued that they had not fraudulently joined the foreign corporations. Second, they argued that the court does have personal jurisdiction over the foreign defendants because CMC, which is in Texas, was the alter ego of at least some of the foreign defendants. Thus, the district court should attribute CMC's Texas contacts to the foreign defendants, giving the district court jurisdiction over those defendants. Finally, the Villars argued that the district court should deny CMC's motion to dismiss based on forum non conveniens because, as a federal court sitting in diversity, the district court should apply Texas state law, which does not recognize the doctrine of forum non conveniens.
Deciding the foreign defendants' motions first, the district court found that the Villars had failed to make a prima facie case for the district court's personal jurisdiction over those defendants. The district court found that the foreign defendants did not have the necessary minimum contacts with the state of Texas, and that they were not the alter egos of CMC. Having dismissed the claims against the foreign corporations, the district court found that complete diversity existed and denied the Villars' motion to remand to state court. Alternatively, the district court held that, even if it must consider the Villars' motion first, complete diversity still existed because there was "no possibility" that the Villars could establish that the court had personal jurisdiction over the foreign defendants. Thus, the district court would still deny the Villars' motion to remand and grant the foreign defendants' motion to dismiss.
The district court then turned to CMC's motion to dismiss for forum non conveniens, which it granted. The district court held that after the California district court dismissed the Villars' suit based on forum non conveniens, the issue became res judicata. Alternatively, the district court held that the Fifth Circuit's law on forum non conveniens applied, and that the Fifth Circuit's law required the dismissal of the action against CMC.
In addition, the district court, sua sponte, enjoined the Villars from instituting another action based on the underlying dispute in any other state or federal court in the United States. Finally, the district court sanctioned the Villars' attorneys under Rule 11 of the Federal Rules of Civil Procedure, for making unreasonable and insupportable arguments. 1 Complaining of multiple errors below, the Villars appeal all of the district court's orders.
The Villars' primary point on appeal is that the district court erred when it chose to consider the foreign defendants' motion to dismiss for lack of personal jurisdiction before considering their motion to remand for lack of complete diversity. The Villars contend that the district court should have considered the motion to remand first because it would have been simpler and more convenient to resolve the motion to remand.
According to the Villars, the motion to remand is simpler because, under the applicable standard of review, the district court need only determine whether there is a possibility the plaintiff could establish jurisdiction over the defendant. Green v. Amerada Hess Corp., 707 F.2d 201, 205 (5th Cir.1983). The district court can usually make this decision without a full scale evidentiary hearing. Id. at 204 n. 2. The motion to dismiss, on the other hand, is more complicated because the district court will generally have to hold an evidentiary hearing in which the plaintiff must prove, by a preponderance of the evidence, that the court has personal jurisdiction. CutCo Industries, Inc. v. Naughton, 806 F.2d 361, 364 (2d Cir.1986). 2 The Villars also contend that the principles of comity and federalism suggest that the district court should have considered the motion to remand first. 3
Unfortunately for the Villars, we have already rejected their primary argument. Walker v. Savell, 335 F.2d 536, 539 (5th Cir.1964). In Walker, we clearly held that district courts have the power to rule on motions challenging personal jurisdiction before reaching motions to remand. As we noted, judicial economy favors this result because if the district court remands the proceeding, then the state court will probably have to decide the same motion to dismiss for lack of personal jurisdiction that the district court avoided. Furthermore, the district court must necessarily address the issue of personal jurisdiction regardless of which motion it addresses first. The Villars' argument that the standard for determining personal jurisdiction will vary depending on which motion the district court decides first does not change the fact that the district court will still have to address the issue of in personam jurisdiction.
We recently reaffirmed our holding in Walker, which continues to be the law in this circuit. Jones v. Petty-Ray Geophysical Geosource, Inc., 954 F.2d 1061, 1066...
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