The opinion of the court was delivered by: BREWSTER
1. DENYING DEFENDANT BOOS' MOTION TO DISMISS FOR LACK OF PERSONAL JURISDICTION;
2. GRANTING DEFENDANT MARIDOME MARINE LTD.'S MOTION TO DISMISS FOR LACK OF PERSONAL JURISDICTION;
3. GRANTING DEFENDANTS' MOTION TO DISMISS FOR LACK OF SUBJECT MATTER JURISDICTION;
4. DENYING DEFENDANTS' MOTION TO DISMISS FOR FAILURE TO STATE A CLAIM UPON WHICH RELIEF CAN BE GRANTED AS MOOT;
5. GRANTING DEFENDANTS' MOTION TO DISMISS FOR FORUM NON CONVENIENS.
This matter came on regularly for hearing on defendants' motions to dismiss for lack of personal jurisdiction, lack of subject matter jurisdiction, failure to state a claim upon which relief can be granted, and for forum non conveniens. Matthew Quint of Wilson & Quint, and Frank Brucculeri of Tabrisky, Brucculeri & Stein appeared for plaintiffs. George Koelzer, Robert Zapf, and Joshua Force of Lane Powell Spears Lubersky LLP appeared for defendants James Boos and Maridome Marine Ltd. Justs Karlson and S. Mark Varney of Carroll, Burdick & McDonough LLP appeared for defendant Boston Whaler Co. After careful consideration of the moving and opposing papers and the oral arguments of counsel, the Court DENIES Boos's motion to dismiss for lack of personal jurisdiction, GRANTS Maridome Marine Ltd's motion to dismiss for lack of personal jurisdiction, GRANTS defendants' motion to dismiss for lack of subject matter jurisdiction, DENIES defendants' motion to dismiss for failure to state a claim upon which relief can be granted, and GRANTS defendants' motion to dismiss for forum non conveniens.
I. Case Type and Jurisdiction
In an accident off the coast of Greece, several crewmembers and guests of the M/Y Maridome were killed or seriously injured when its tender collided with a steel structure in the harbor of Port of Poros. Plaintiffs have filed suit against the vessel, in rem, against its captain and owner, in personam, and against the manufacturer of the tender, in personam. Plaintiffs allege causes of action based on the Death on the High Seas Act (DOHSA), 46 U.S.C. § 741 et seq., the Jones Act, 42 U.S.C. § 688 et seq., and General Maritime Law.
The M/Y Maridome ("Maridome") is a 177 foot luxury yacht owned by Maridome Marine Limited ("MML"), a Channel Islands (U.K.) company. The Maridome is of British Registry and flies the British flag. MML has only issued two shares of stock which are held by nominees for the benefit of Enrique Molina. Molina is the C.E.O. of GEMEX, the largest bottler for Pepsi outside of the United States. Molina lives and does business in Mexico. The ship travels around the world.
The Captain of the Maridome is James Boos ("Boos"), an American citizen who has not lived in the United States in the past twenty years.
MML's board of directors are all British citizens. Plaintiffs contend that these directors have no responsibility for the management or operation of the Maridome. MML was incorporated in the Channel Islands because they are a tax haven. The attorneys who incorporated MML also serve as its nominal board of directors.
B. Summary of the Accident
On September 3, 1995, the Maridome was anchored off the coast of Port of Poros, Greece. Several crew members were on shore for the evening. In the early morning hours, they radioed the ship and First Engineer Ian MacNeil drove the ship's tender, a 21 foot customized Boston Whaler, to shore. He picked up a large number of passengers and began driving across the harbor. Plaintiffs contend that MacNeil was intoxicated, was traveling at an excessive rate of speed, and that the tender was seriously overloaded. While traveling across the harbor at approximately 25 knots, the tender struck a metal structure lying in shallow water. Passengers Nicholas Warn, George Stathopoulos, Andreas Brigman, and Simon Willshaw were killed in the accident. Richard Brooks was seriously injured.
Warn, Willshaw and Brooks were crewmembers of the Maridome and were citizens of the United Kingdom. They signed employment contracts in Barbados, Gibraltar and St. Martin, respectively. Brigman and Stathopoulos were guests on the tender and were dual citizens of Greece and Germany.
On October 16, 1996, plaintiffs attached the Maridome in San Diego pursuant to Supplemental Rule B for Certain Admiralty and Maritime Claims while it was being repaired. Captain Boos was onboard the vessel when it was attached, and he was personally served with a copy of the summons and complaint in this case. After posting a $ 15,000,000 bond, the Maridome was released. It left San Diego shortly thereafter.
Defendants Maridome, MML and Boos have filed a motion to dismiss for lack of personal jurisdiction, lack of subject matter jurisdiction, failure to state a claim upon which relief can be granted, and forum non conveniens. Defendant Whaler filed a motion to dismiss for forum non conveniens.
Since the issues of personal jurisdiction and forum non conveniens are at the heart of this motion, there is a more detailed analysis of the Maridome's contacts with the United States below.
D. Management of the Maridome
Upon purchasing the Maridome, Molina hired Peter Lee ("Lee"), a resident of Virginia, to captain the ship for him. Lee served as captain from August 1992 until April 1994. Lee's duties as captain included hiring the crew, and managing the ship's accounts, repair work, insurance, and all other aspects of the ship's day to day operations. Lee stepped down as captain in April 1994, but remained the manager of the Maridome until August 1995, just days before the accident. During this time, he managed the Maridome out of his home in Virginia. MML provided Lee with a power of attorney which allowed him to manage all aspects of the Maridome, save selling or mortgaging it.
Much of the management of the Maridome occurred in the United States. In February 1994, Lee formed a Virginia corporation, Marine Management, Inc. ("MMI"), to manage the Maridome and another of Enrique Molina's yachts, the Esterel. Lee was paid $ 100,000 per year to manage the crew hiring; supervise repair work; handle ship's mail, parts and supplies; and to submit monthly budgets and accounting summaries to Molina. During this 18 month period, Lee worked approximately 30 hours per week performing these duties. He maintained over 3500 pages of records in his home office regarding his management of the Maridome. Defendants contend that Falb, Molina's chief financial advisor, actually makes the business decisions regarding the Maridome.
Lee's duties were slowly diminished during 1995, and were terminated completely only two or three days before the accident in Port of Poros, Greece.
Other specific contacts with the United States are listed below:
1. The Maridome has always used U.S. insurance brokers to procure insurance. The insurance was actually placed, however, with underwriters in London, England.
2. The permanent mailing address for the ship's mail has always been in the United States. Parts and other supplies were also sent to this address to be forwarded to the ship.
3. Molina set up a bank account with NationsBank in Texas into which he deposited money for the operation and management of the Maridome. Lee used the money in this account for all of the expenses of the Maridome. When there were insufficient funds in the account, Lee would advance money from MMI accounts in Virginia and would be reimbursed.
4. Four of the five significant repairs that have been performed on the vessel have taken place in the United States.
5. Satellite communications services are provided for the vessel by Seven Seas Communications in Miami, Florida.
7. The Boston Whaler tender was purchased by MMI from Lauderdale Marine in Florida. The tender was also installed in Florida.
8. The Maridome has only stopped in California twice in the past two years: once to refuel and once for repairs. It was during this second stop that the ship was arrested. Similarly, Captain Boos's only two contacts with California are these two visits.
1. In Rem and Quasi in Rem Jurisdiction
Defendants MML and Boos move to have the in personam suits against them dismissed for lack of personal jurisdiction. Defendant Maridome is not moving to have the in rem case against it dismissed on jurisdictional grounds. In rem jurisdiction was established when the ship was arrested in this district. The fact that the Court has in rem jurisdiction over the vessel does not mean that the Court has in personam jurisdiction over MML or Captain Boos.
The Supplemental Rule B attachment of the Maridome provides the Court with quasi in rem jurisdiction over MML to the extent of the value of the Maridome. See Stevedoring Services of America v. Ancora Transport, 941 F.2d 1378, 1381 (9th Cir. 1991), cert. granted and vacated on other grounds, 506 U.S. 1043, 122 L. Ed. 2d 112, 113 S. Ct. 955 (1993). Maritime attachment pursuant to Rule B has two purposes: (1) "to obtain jurisdiction of the respondent in personam through his property," and (2)"to assure satisfaction of any decree in libelant's favor." Id. "Although jurisdiction achieved through maritime attachment is denominated 'in personam,' it is clear that, absent personal service or an appearance by defendant, the judgment had is in the nature of quasi in rein." Id.; see Polar Shipping Ltd. v. Oriental Shipping Corp., 680 F.2d 627, 637 (9th Cir. 1982) ("Assets of the owner . . . within the jurisdiction today, may be transferred elsewhere or paid off tomorrow. It is for these reasons that . . . attachment in actions in personam, Supplemental Rule B, [was] developed. These reasons are as valid today as they ever were."). Once someone's property is attached, the Court has jurisdiction over that person for a judgment up to the value of the property seized. This means that the Court has jurisdiction over MML up to the value of the $ 15,000,000 bond which has been posted, regardless of whether it is denominated in personam, in rem or quasi in rem jurisdiction.
Quasi in rem jurisdiction under Supplement Rule B is only available when the defendant's contacts with the forum are insufficient to maintain normal in personam jurisdiction over the defendant. "With respect to any admiralty or maritime claim in personam a verified complaint may contain a prayer for process to attach the defendant's goods and chattels, . . . if the defendant shall not be found within the district." Supplemental Rule B(1); see State of Oregon v. Tug Go Getter, 398 F.2d 873, 874 (9th Cir. 1968) (finding that defendant had to not be found within the district in order for a Rule B attachment to be proper).
The only effect of MML's challenging personal jurisdiction is that if the Court finds no personal jurisdiction, and a judgment were entered by the Court in excess of the $ 15,000,000 bond that has been posted, MML would not be liable for a deficiency judgment.
2. Statutory Authority for the Exercise of Personal Jurisdiction
Pursuant to Rule 12(b)(2), a court may dismiss a suit for "lack of jurisdiction over the person." Fed. R. Civ. P. 12(b)(2). The Ninth Circuit has established a two-step test for determining the propriety of asserting personal jurisdiction:
First, the relevant state's long-arm statute must permit jurisdiction. Second, the exercise of jurisdiction must be consistent with the demands of due process.
Greenspun v. Del E. Webb Corporation, 634 F.2d 1204, 1207 (9th Cir. 1980) (citing H. Ray Baker v. Associated Banking Corporation, 592 F.2d 550, 551 (9th Cir. 1979), cert. denied, 444 U.S. 832, 100 S. Ct. 63, 62 L. Ed. 2d 42 (1979)). As to the first inquiry, California Civil Procedure Code § 410.10 provides that "a court of this state may exercise jurisdiction on any basis not inconsistent with the Constitution of this state or of the United States." CAL. CIV. PROC. CODE § 410.10 (Deering 1991). Thus, the "statutory limitations upon jurisdiction are 'coextensive with the outer limits of due process under the state and federal constitutions, as those limits have been defined by the United States Supreme Court.'" Data Disc, Inc. v. Systems Technology Associates, Inc., 557 F.2d 1280, 1286 (9th Cir. 1977) (citing Republic International Corporation v. Amco Engineers, Inc., 516 F.2d 161, 167 (9th Cir. 1976)).
A defendant must have certain "minimum contacts" with the forum so that the Court's exercise of jurisdiction does not "offend traditional notions of fair play and substantial justice." Data Disc, Inc., 557 F.2d at 1287 (citing International Shoe Company v. Washington, 326 U.S. 310, 316, 66 S. Ct. 154, 90 L. Ed. 95 (1945)).
The Supreme Court has bifurcated this due process determination into two inquiries, first, that the defendant have the requisite contacts with the forum state to render it subject to the forum's jurisdiction, and second, that the assertion of jurisdiction be reasonable.
Amoco Egypt Oil Co. v. Leonis Navigation Co., Inc., 1 F.3d 848, 851 (9th Cir. 1993). When a defendant moves to dismiss for lack of personal jurisdiction pursuant to Rule 12(b)(2), the plaintiff has the burden of making "a prima facie showing of jurisdictional facts." Data Disc, 557 F.2d at 1285-86. The ...