Volkswagen of America, Inc. v. SS Silver Isle

• Decision Date: 29 March 1966
• Docket Number: No. A 65-7.,A 65-7.
• Citation: 257 F. Supp. 562
• Parties: VOLKSWAGEN OF AMERICA, INC., Import Motors of Chicago, Inc., and Midwestern VW Corp., Libelants, v. S.S. SILVER ISLE, her engines, boilers, etc., and Mohawk Navigation Company, Ltd., Respondents.
• Court: U.S. District Court — Northern District of Ohio

257 F. Supp. 562

VOLKSWAGEN OF AMERICA, INC., Import Motors of Chicago, Inc., and Midwestern VW Corp., Libelants, v. S.S. SILVER ISLE, her engines, boilers, etc., and Mohawk Navigation Company, Ltd., Respondents.

No. A 65-7.

United States District Court N. D. Ohio, E. D.

March 29, 1966.

Robert B. Preston, Arter, Hadden, Wykoff & Van Duzer, Cleveland, Ohio, Hill, Rivkins, Louis & Warburton, New York City, for libelants.

Thos. O. Murphy, Johnson, Branand & Jaeger, Lee C. Hinslea, McCreary, Hinslea & Ray, Cleveland, Ohio, Beauregard, Brisset & Reycraft, Montreal, Quebec, for respondents.

MEMORANDUM RE: MOTION TO DISMISS

KALBFLEISCH, District Judge.

This libel in admiralty was filed against respondents for alleged damage to libelants' cargo which was on board the S.S. Prins Alexander at the time a collision occurred between respondent S. S. Silver Isle and the Prins Alexander.

Respondents admit that this Court has jurisdiction, but contend that the Court should decline jurisdiction under the rule of Canada Malting Co. v. Paterson Co., 285 U.S. 413, 52 S.Ct. 413, 76 L.Ed. 837 (1932), and other authorities. In Canada the Supreme Court stated, at page 418, 52 S.Ct. at page 414:

"In a suit in admiralty between foreigners it is ordinarily within the discretion of the District Court to refuse to retain jurisdiction; and that the exercise of its discretion will not be disturbed unless abused."

Jurisdiction over an action between foreign nationals must be exercised unless special circumstances exist to show that justice would be better served by declining it. The Belgenland, 114 U.S. 355, 5 S.Ct. 860, 29 L.Ed. 152 (1885); Motor Distributors, Ltd. v. Olaf Pedersen's Rederi A/S, 239 F.2d 463 (5th Cir., 1957), cert. den. 353 U.S. 938, 77 S.Ct. 816, 1 L. Ed.2d 760 (1957).

Respondents allege, and support their allegation by affidavit and exhibits, that the Silver Isle is a Canadian vessel. The libel alleges that the Mohawk Navigation Company, Ltd. is a Canadian corporation. Respondents further allege that the damaged cargo was insured by German insurers and shipped by a German shipper in a Dutch vessel (The Prins Alexander) under bills of lading issued in Hamburg, Germany. Nonetheless, paragraph 4 of the libel alleges, and respondents do not deny, that at the time of the collision "libelants were the lawful owners and holders of bills of lading governing the cargo * * * and of any claim and any right of recovery for loss thereof or damage thereto." Moreover, paragraph 5 of the libel alleges that "libelants' cargo" was damaged.

Libelants are allegedly American corporations, and respondents' contrary claim that libelants are "nothing more than local distributors of the parent German manufacturer" is unsupported by affidavit or other evidence, thus it cannot be considered by this Court. Since libelants are American nationals the Court's discretion is further limited. In States Marine Lines, Inc. v. The M/V Kokei Maru, 180 F.Supp. 255 (1960) the Northern California District Court stated, at page 258:

"It is possible that the various factors of convenience here involved might justify refusal of jurisdiction if this were a suit between foreigners. However, in this case the American nationality of libelant is an additional factor which we are entitled to consider of sufficient importance to justify the retention of jurisdiction, unless it appears that such retention would operate to deprive the foreign party of substantial justice. No such showing has been made here."

See also The Suadades, 67 F.Supp. 820 (1946).

Respondents' principal contentions are that the owners of the ...