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MATEO v. THE M/S KISO

UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF CALIFORNIA


November 19, 1991

DIOSDADO Z. MATEO, et al., Plaintiffs,
v.
THE M/S KISO, in rem, et al., Defendants.

The opinion of the court was delivered by: JENSEN

ORDER

 On October 23, 1991, the Court heard defendants' motion for reconsideration of portions of the August 13, 1991 Order in this case denying defendants' motion for summary judgment. Frederick W. Wentker, Jr. and Phillip Dalton of Lillick & Charles appeared on behalf of defendants the M/S Kiso and Vesta Co., Ltd.; Marvin Stender, of McTernan, Stender & Walsh, and Richard Dodson appeared on behalf of plaintiffs. For the reasons set forth below, defendants' motion for reconsideration is GRANTED IN PART and DENIED IN PART.

 I. BACKGROUND

 The facts and history of this case are complex and are summarized in the Court's August 13, 1991 Order ("August Order"). Briefly, the present motion arises in an action by twenty Filipino seamen working aboard the M/S Kiso (the "Kiso") against the Kiso, in rem, and the owners and managers of the Kiso. The Kiso is a Liberian-flagged vessel which carries goods between the United States and Japan. The title owner of the Kiso is defendant Vesta Company, Ltd, ("Vesta") a Liberian corporation. The beneficial owner of the Kiso, however, is a Japanese corporation, defendant Nippon Yusen Kaisha Ship Management Corporation ("NYK"). The officers of the Kiso are also Japanese. Vesta contracted the responsibility for managing the Kiso to defendant Orion Shipping Co., Ltd. ("Orion"), a Japanese corporation. Plaintiffs allege that, while employed by defendants, they were subject to a pervasive pattern of abuse, including double-booking practices and non-payment of wages.

 The Court heard plaintiffs' and defendants' cross-motions for summary judgment on June 14, 1991. The Court considered three issues in the August Order. First, the Court found that the Association of Marine Officers' and Seamens' Union of the Philippines ("AMOSUP") 1989 Collective Bargaining Agreement ("1989 CBA") governed plaintiffs' employment relationship with defendants; the Court granted summary judgment to plaintiffs on this issue. Second, plaintiffs and defendants also sought summary judgment on the effect of a Japanese arbitration proceeding on plaintiffs' wage claims. The Court held that neither party had sufficiently demonstrated that the Japanese arbitration did or did not bar plaintiffs wage claims, and therefore denied summary judgment to both parties. Finally, defendants moved for summary judgment on plaintiffs' claim under 46 U.S.C. § 10313, because (1) plaintiffs arguments were not made in good faith; (2) plaintiffs were paid in a timely fashion all wages due them under the 1989 CBA; and (3) with respect to plaintiff Salvador Ocampo, because Ocampo was not discharged in a United States port. This motion for summary judgment was also denied.

 On September 13, 1991, the Kiso and Vesta (collectively "defendants") filed a motion for reconsideration of the Court's August Order, on grounds that (1) defendants' did not concede that plaintiffs were "discharged" within the meaning of § 10313 and (2) plaintiff Ocampo should have been denied standing because he was a foreign seaman discharged in a foreign country.

 II. ANALYSIS

 A. The Legal Standard

 Federal Rule of Civil Procedure 60(b) governs the reconsideration of final orders. That rule permits the court to relieve a party from a final judgment or order on grounds of

 (1) mistake, inadvertence, surprise, or excusable neglect; (2) newly discovered evidence which by due diligence could not have been discovered in time to move for a new trial under Rule 59(b), (3) fraud . . . of an adverse party, . . . or (6) any other reason justifying relief from the operation of the judgment.

 Rule 60(b) motions apply only to final judgments, however, and not to interlocutory rulings. Nevertheless, district courts are authorized to reconsider interlocutory orders at any time prior to final judgment, independently of Rule 60(b). 11 Wright & Miller, Federal Practice and Procedure, § 2852, at 145; Vaughn v. Regents of University of California, 504 F. Supp. 1349, 1351 (E.D. Cal. 1981). Motions to reconsider are committed to the discretion of the trial court. Combs v. Nick Garin Trucking Co., 263 U.S. App. D.C. 300, 825 F.2d 437, 441 (D.C. Cir. 1987) (citing cases) (involving motion to reconsider a default judgment). Nevertheless, the Court looks to the standard used in examining a Rule 60(b) motion.

 An order may be reconsidered if the Court made a clear error of law or if the prior order caused a manifest injustice to occur. In order for a party to demonstrate clear error, the moving party's arguments cannot be the same as those made earlier. Great Hawaiian Fin. Corp. v. Aiu, 116 F.R.D. 612, 617 (D.Haw. 1987) (citations omitted). If a party simply inadvertently failed to raise the arguments earlier, the arguments are deemed waived. Id. To succeed on a such a motion to reconsider, a party "must set forth facts or law of a strongly convincing nature to induce the court to reverse its prior decision." Id. at 616.

 B. Application

 1. Defendants' "Discharge" Arguments

 A seaman's right to wages is regulated by, among other things, 46 U.S.C. § 10313. *fn1" The statute, in part, entitles a seaman to receive on demand, one half of the balance of wages earned and unpaid at each port at which the vessel loads or delivers cargo during the voyage. Id. § 10313(e). The statute also requires the ship's master to pay a seaman all remaining wages within a specific period of time after the seaman's discharge, and imposes a penalty upon the master or owner if payment of wages after discharge is delayed. Id. § 10313(f)-(g). As noted in the August Order, the purpose of § 10313 is "'to secure prompt payment of seaman's wages . . . and thus to protect them from the harsh consequences of arbitrary and unscrupulous action of their employers, to which, as a class, they are peculiarly exposed.'" Griffin v. Oceanic Contractors, Inc., 458 U.S. 564, 102 S. Ct. 3245, 3250, 73 L. Ed. 2d 973 (1982) (Rehnquist, J.) (quoting Collie v. Fergusson, 281 U.S. 52, 55, 74 L. Ed. 696, 50 S. Ct. 189 (1930)). In light of this purpose, § 10313 and its predecessors have been liberally construed in favor of seamen. Isbrandtsen Co. v. Johnson, 343 U.S. 779, 72 S. Ct. 1011, 1014, 96 L. Ed. 1294 (1952) (construing 46 U.S.C. §§ 596 & 597)("Whenever congressional legislation in aid of seamen has been considered here, since 1872, the Court has emphasized that such legislation is largely remedial and calls for liberal interpretation in favor of seamen").

 Defendants argue that the Court made several clear errors of fact and law in the August Order pertaining to its application of § 10313. Specifically, defendants claim that they did not concede at oral argument that plaintiffs were "discharged" within the meaning of § 10313, as the August order states. *fn2" Rather, defendants assert that they used the term "manufactured discharge" in all briefs and in oral argument to indicate that no true "discharge" had actually occurred. Because plaintiffs did not make a demand for half wages or receive a refusal of this demand at the Oakland port, defendants assert that plaintiffs' departure was unjustified and, therefore, amounted to desertion. As desertion requires a forfeiture of all wage claims, defendants argue that summary judgment in favor of defendants was appropriate as to the wage claims of all twenty defendants.

 Defendants have also attached a portion of the deposition of International Transport Workers' Federation ("ITF") representative Anthony Sasso ("Sasso"). They offer this deposition as proof that Sasso never made a wage demand when plaintiffs left the ship, and, therefore, plaintiffs' departure was unjustifiable desertion. Even if Sasso did make a wage demand, defendants argue, the Order states that this demand was for all wages then due, not for half of the wages then due. As plaintiffs never had a right to demand full wages, denial of that demand would not justify plaintiffs' decision to leave the ship, and therefore, plaintiffs were deserters.

 Plaintiffs assert that Sasso made a wage demand on their behalf on August 19, 1990, before leading plaintiffs off the ship at Oakland. Plaintiffs also assert that they demanded their wages in their complaint, which was filed with this Court on August 17, 1990, two days before they left the ship. In their first amended complaint, plaintiffs again allege that demands for payment and half-payment were repeatedly made and refused. First Amended Complaint, PP 16, 17, 20, 23.

 The Court agrees with defendants that plaintiffs have not offered evidence to support their claim that they demanded half wages, pursuant to § 10313(e), while in a United States port. This conclusion is based upon further review of the case file, rather than the arguments of defendants, however.

 The wage claims within plaintiffs' first amended complaint are pleaded in very general terms. The complaint states that plaintiffs made a demand "upon defendants . . . for their full wages and back pay in accordance with the terms of their contracts and . . . [section] 10313(f). The defendants refused each and every such demand for full wages. Named plaintiffs and members of plaintiffs' class also made demand for half wages pursuant to . . . [section] 10313(e)." First Amended Complaint, at P 17. Plaintiffs also assert that demands for wages were made while in United States waters. Id. at PP 16, 20. Plaintiffs then state that they, as a group, are seeking both back wages and penalty wages owed them. Id. at P 23.

 Yet plaintiffs' Statement of Undisputed Facts, filed on May 1, 1991, contradicts the first amended complaint and specifically indicates that such a demand was not made in United States waters. *fn3" Plaintiffs, in their original complaint and the Statement of Undisputed Facts, instead argue that:

 

Plaintiffs made a legally sufficient demand for advances of one-half of their earned wages under 46 U.S.C. § 10313(e) by signing the monthly pay receipts for the wages specified in the shipping articles which were not paid. . . . While a specific demand for half wages may be necessary in ordinary circumstances, free from fraud, duress, intimidation, or coercion, it would be anomalous to impose that requirement where, as here, a demand would lead to certain discharge and retaliation as promised by Captain Ushida. . . . [executing the pay receipts] complied with the underlying purposes of [§ 10313(e)'s] demand requirement.

 Plaintiffs' Memorandum in Support of Motion for Partial Summary Judgment, at 26, n. 12; see also Plaintiffs' Statement of Undisputed Facts, at 23.

  Courts have long held that, absent an explicit demand for payment of wages and a denial of that demand, no claim under § 10313(e) or former § 597 can stand. See Sigalas v. Lido Maritime, Inc., 776 F.2d 1512 (11th Cir. 1985); Lardings v. Hudson Waterways Corp., 640 F.2d 997 (9th Cir. 1981); Fitzgerald v. Liberian S/T Chryssi P. Goulandris, 582 F.2d 312 (4th Cir. 1978). "The demand must be plainly made so that the master will know exactly what is demanded of him, and since if he refuses the payment of the half wages, all of the wages then become due, it becomes obvious that clarity in the making of the demand is essential." Norris, The Law of Seamen, § 17:33.

 Although plaintiffs argue that the act of signing pay receipts for wages not received is the functional equivalent of an explicit demand for half wages, this argument is unpersuasive in light of the purpose of § 10313(e). The signing of the receipts for wages not received is not a clearly made demand for half wages sufficient to place the ship's master on notice of plaintiffs' claims. Furthermore, this act could easily be interpreted by the master as acceptance of the double-booking scheme, rather than a demand for the higher pay scale set forth in the 1989 CBA.

 The Court is also unwilling to create the exception to the demand requirement suggested by plaintiffs. Plaintiffs have offered no evidence of duress other than the economic duress that may have resulted from the alleged withholding of their wages. As such an economic duress argument could be made by virtually any seaman who has had wages improperly withheld, such an exception would eliminate the demand requirement of § 10313(e) altogether.

 Plaintiffs' argument that their complaint constituted a demand for wages under § 10313(e) is equally unpersuasive. First, the complaint does not plainly state that it is a demand for wages under § 10313(e). Rather, the complaint states that demands for wages pursuant to § 10313(e)-(f) had already been made prior to the filing of the complaint. Plaintiff's Complaint, at P 16. As noted above, plaintiffs have failed to offer any evidence to support their claim that such demands were made. Had plaintiffs actually made a demand for wages while in the United States waters, they could have submitted affidavits from the plaintiffs who made the demand, or other supporting evidence to lend credibility to their claim. Second, even if the complaint filed on August 17, 1990 did constitute a statutory wage demand, that complaint was filed on behalf of only three plaintiffs *fn4" and could not be construed as a wage demand for all twenty of the plaintiffs who are now a part of this action. Because plaintiffs have failed to offer any evidence that a demand for wages was "plainly made," as the law requires, defendants' motion for reconsideration is GRANTED as to all § 10313(e) claims. Defendants' motion for summary judgment is GRANTED as to these claims.

 A demand for payment is not necessary to a maintain a claim under § 10313 (f)-(g), however. Subsection (f) requires that a seaman receive the balance of wages owing "within 24 hours after the cargo has been discharged or within 4 days after the seaman is discharged, whichever is earlier." § 10313(f). Subsection (g) imposes a penalty upon the master or the owner of the ship if payment of subsection (f) wages is delayed, without sufficient cause. To survive defendants' motion for summary judgment, plaintiffs were required to come forth with substantial evidence raising genuine issues of material fact.

 In the August Order, the Court indicated that plaintiffs had met that burden in several ways. Under § 10313(f)-(g), defendants should have paid plaintiffs all accrued salary, including overtime, vacation, longevity, and transportation pay no later than August 20, 1990 at 9 p.m. *fn5" Defendants admittedly did not pay base salary until one day later or vacation pay until over one month later. The August Order also indicates that plaintiffs submitted "substantial evidence indicating that [a number of] plaintiffs . . . had two or more years experience entitling them to monthly longevity pay." August Order, at 45-46. The balance sheets submitted by defendants, however, did not indicate that longevity pay had ever been given to any plaintiff. The Court then held that this evidence was sufficient to allow plaintiffs to survive defendants' motion for summary judgment.

 The present motion does not undermine the evidence presented to the Court at the summary judgment stage. Furthermore, although defendants argue that plaintiffs deserted the ship and thus forfeited all wage claims, this issue remains a question of fact that may not properly be resolved on a motion for summary judgment.

 Desertion is defined as "the abandonment of duty by a seaman by quitting the ship before the end of the engagement [1] without consent, [2] without justification and [3] with the intention of not returning to the ship's service." Norris, The Law of Seamen, § 8:7. After a seaman has deserted his ship:

 an entry of this fact must be promptly made in the vessel's official log book. The entry must be signed by the master and witnessed by the mate or one of the crew. . . . A proper log entry should set forth all of the facts of the alleged desertion. If the seaman has taken his clothes with him, it should be so stated; also any statements made by him evidencing an intent to abandon the ship, the place and hour of desertion, the names and ratings of witnesses, etc.

 Id., at § 8:4.

 Although plaintiffs failed to make a wage demand, the Court can not presently hold that plaintiffs' departure at Oakland lacked justification. First, defendants have conceded that plaintiffs were subject to a double-booking scheme. Second, other evidence suggests that plaintiffs have been denied longevity and overtime pay to which they are entitled. Either of these facts might provide justification for plaintiffs' departure. Finally, in response to plaintiffs' claim that their alleged desertion was not properly logged, defendants assert that such logging was not required unless defendants intended to formally charge plaintiffs with desertion. Defendants' Reply to Opposition to Motion for Reconsideration, at 3. Thus, defendants apparently concede that they did not follow the generally accepted procedures for establishing desertion. Because plaintiffs have offered evidence sufficient to demonstrate that their departure from the ship at Oakland was justified, and as defendants have not offered evidence sufficient to establish that plaintiffs deserted the ship, defendants' motion for reconsideration must be DENIED as to the portion of the August Order pertaining to plaintiffs' § 10313(f)-(g) claims.

 2. The Applicability of § 10313 to Plaintiff Salvador Ocampo

 Defendants' other argument addresses the August Order's holding that § 10313 applies to the claims brought by plaintiff Salvador Ocampo ("Ocampo"). While the other plaintiffs in this suit were discharged in Oakland, California, Ocampo was not discharged until the ship reached Japan. Defendants assert that "the Ninth Circuit's silence on the subject notwithstanding, granting standing to plaintiffs such as Ocampo contravenes fundamental principles relating to application of United States law." Defendants' Memo., at 6. *fn6" Defendants argue on the basis of several other circuit court decisions that § 10313 requires discharge of foreign seamen in a United States harbor for the seamen to sue under the statute. Because Ocampo's case involves the activity of a foreign seaman, taking place outside of the United States on a foreign ship operated by a foreign employer, defendants argue that § 10313(i) cannot provide him with a remedy. Furthermore, defendants argue that the Court's holding *fn7" is "at odds with rules of statutory construction previously and repeatedly observed by the Supreme Court." Defendants' Memo., at 6-7. These Supreme Court decisions, defendants argue, create an overriding presumption against extraterritorial application of United States law. *fn8"

 The Court agrees with defendants that the portion of the August Order pertaining to Ocampo's claims requires reconsideration. Section 10313 (i) clearly indicates that it applies "to seamen on a foreign vessel when in a harbor of the United States." The question before this Court, however, is whether the statute applies to a foreign seamen on a foreign vessel who was discharged in a foreign port.

 The case law on this subject is, at best, contradictory and confusing. See, e.g., Fitzgerald v. Liberian S/T Chryssi P. Goulandris, 582 F.2d 312 (4th Cir. 1978)(extraterritorial discharge of Greek seaman would not necessarily preclude applicability of former sections 596, 597, and 599); Ventiadis v. C.J. Thibodeaux & Co., 295 F. Supp. 135 (D.C. Tex. 1968) (Greek seaman's discharge outside of United States did not render section inapplicable where seaman signed on in United States port and vessel made regular voyages to and from United States ports); I Hyeon Su v. M/V Southern Aster, 1990 U.S. Dist. LEXIS 12791 (May 10, 1990 Oregon) (46 U.S.C. § 10313 requires discharge of either cargo or crew in the United States as a prerequisite to foreign seamen's recovery of penalty wages). Discerning the applicable law in the present case is difficult because each of these cases may be distinguished from this action on a variety of grounds. For example, in the Ventiadis case, the court held that "to limit [what is now 46 U.S.C. § 10313] only to instances in which the seaman is discharged in a American port would be to unreasonably restrict its effect. In addition, since the beneficial ownership of the ship was in the United States citizens, the suit is between foreigners only technically." Ventiadis, 295 F. Supp. at 137. By comparison, the present case is actually, not technically, between foreigners.

 In the Fitzgerald case, the statute was found to apply where the plaintiff, ship, contract, employer, and point of discharge were all foreign, but where the plaintiff had boarded the ship in the United States. Fitzgerald, 582 F.2d at 313. Ocampo did not board the Kiso in the United States, however. In Escobar v. S.S. Washington Trader, 640 F.2d 1063 (9th Cir. 1981), the court applied the statute to a seaman who was discharged in the Philippines. There is no discussion in that case, however, as to the nationality of the plaintiff or the appropriateness of applying the statute to a seaman discharged abroad.

 Thus, the best guidance for the Court's decision is § 10313 itself. That statute provides, in relevant part:

 (e) After the beginning of the voyage, a seaman is entitled to receive . . . on demand, one half of the balance of wages earned and unpaid at each port at which the vessel loads or delivers cargo during the voyage. . . . If a master does not comply with this subsection, the seaman is released from the agreement and is entitled to payment of all wages earned. . . .

 (f) At the end of the voyage, [or upon discharge] the master shall pay each seaman the balance of wages due the seaman . . . .

 (g) When payment is not made as provided in 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. . .

 46 U.S.C. § 10313 (emphasis added). Subsection (i) indicates that the statute applies to any seaman, whether American or foreign, while in a harbor of the United States. The question for this Court, then, is to determine whether a violation of the statute occurred in a harbor of the United States as to Ocampo.

 Under the terms of subsection (e), an actionable claim for one-half back wages is made when a seaman demands the wages and is refused while the ship is in port delivering or loading cargo. Under subsection (f), a claim for the remainder of a seaman's wages arises when a shipowner does not fully pay the seaman at the end of the voyage or upon discharge. Claims under the these subsections are distinct, however, and penalty wages are available only in the event of a violation of subsection (f).

 The complaint asserts that Ocampo's subsection (e) right to receive one-half of his back wages was violated while Ocampo was in United States waters. However, this portion of Ocampo's claim fails because, as discussed above, plaintiffs failed to provide evidence that a demand for wages was made. Furthermore, because Ocampo was discharged in Japan, he cannot claim that defendants failed to promptly pay the balance of his wages upon discharge while Ocampo was in the United States. As the statute only applies to seamen while they are in a harbor of the United States, subsection (f) of the statute cannot apply to Ocampo. By its own terms, subsection (g) of the statute also cannot apply to Ocampo because the penalty wage provisions only arise in the event of a violation of subsection (f). As a result, defendants' motion for reconsideration is GRANTED as to Ocampo's claims under § 10313(f)-(g). Defendants' motion for summary judgment as to these claims is GRANTED.

 III. CONCLUSION

 For the reasons set forth above, the Court makes the following rulings:

 1. Defendants' motion for reconsideration of this Court's August 13, 1991 Order is hereby GRANTED where it pertains to the Order's denial of summary judgment as to all plaintiffs' claims under 46 U.S.C. § 10313(e); defendants' motion for summary judgment as to these claims is GRANTED.

  2. Defendants' motion for reconsideration of this Court's August 13, 1991 Order is hereby GRANTED where it pertains to Salvador Ocampo's claims under 46 U.S.C. § 10313 (f)-(g); defendants' motion for summary judgment as to these claims is GRANTED.

 3. Defendants' motion for reconsideration of this Court's August 13, 1991 Order is hereby DENIED where it pertains to the claims of all remaining plaintiffs under 46 U.S.C. § 10313(f)-(g).

 IT IS SO ORDERED.

 DATED: November 19, 1991

 D. Lowell Jensen

 United States District Judge


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