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Bartholomew v. Universe Tankships Inc.

decided: January 9, 1959.

ASTON BARTHOLOMEW, PLAINTIFF-APPELLEE,
v.
UNIVERSE TANKSHIPS, INC., DEFENDANT-APPELLANT.



Author: Medina

Before CLARK, Chief Judge, and MEDINA and LUMBARD, Circuit Judges.

MEDINA, Circuit Judge.

Aston Bartholomew, a citizen of the British West Indies, was a seaman on board the Ulysses, a vessel owned and operated by appellant, a Liberian corporation, and flying the flag of Liberia. On April 15, 1952, as the vessel was proceeding within the three-mile limit, and hence in the territorial waters of the United States, Bartholomew was assaulted by a fellow member of the crew who had previously attacked other seamen. The complaint alleged a claim based upon the Jones Act, another based upon alleged unseaworthiness under the Maritime Law and a third claim for maintenance and cure, also under the Maritime Law. Over the objection of appellant the trial judge held: that the circumstances disclosed by the evidence made the Jones Act applicable; that, although the trial was had on the civil side of the Court to a judge and jury, and not in admiralty, there was pendent jurisdiction over the maritime cause for unseaworthiness of the vessel; and he submitted both the Jones Act claim and the maritime cause for unseaworthiness to the jury, reserving the maintenance and cure maritime cause for decision by himself as a "judge in admiralty," his determination to be based upon the evidence adduced at the trial and such further proofs as the parties might wish to offer later. The jury found for Bartholomew on each of the claims submitted to it, fixing the damages in the sum of $24,600, or $25,000, less the $400 paid upon the signing of a release by Bartholomew which the jury disregarded as not binding on him. The maintenance and cure claim is held in abeyance pending the outcome of this appeal.

Appellant contends: that the court below improperly found the Jones Act applicable; that in any event the maritime cause should not have been submitted to the jury; that it was error to refuse to give certain instructions to the jury as requested by appellant; and that the motion to set aside the verdict and grant a new trial should have been granted because the jurors allegedly compromised their views on the subject of damages. We shall discuss seriatim these points and the evidence and the portions of the record relevant to each.

Applicability of the Jones Act

Did the District Court err in holding that Bartholomew had a right to invoke the Jones Act against his employer, a Liberian corporation? In Lauritzen v. Larsen, 1953, 345 U.S. 571, at page 582, 73 S. Ct. 921, at page 928, 97 L. Ed. 1254, the Supreme Court tells us that the answer is to be found by "ascertaining and valuing points of contact between the transaction and the states or governments whose competing laws are involved," and by "weighing * * * the significance of one or more connecting factors between the shipping transaction regulated and the national interest served by the assertion of authority," such as the place of the wrongful act, the law of the flag, the allegiance or domicile of the claimant, the allegiance of the shipowner, the place of contract between the parties, the inaccessibility of the foreign forum and the law of the forum.

A study of the numerous adjudicated Jones Act cases reveals not only the vagueness inherent in the general and undefined direction in Lauritzen for the "valuing" and "weighing" of the various facts or groups of facts that are said to be "points of contact" between the transaction and the states whose competing laws are involved, but also a lack of any common principle of decision or method of approach to the problem. Sometimes the courts seem to be employing choice of law techniques, and not infrequently the result arrived at seems to be based on mere dialectic manipulation or guesswork. All this, however, is to be expected as new law develops in a new field. This substantial background of judicial consideration of a great variety of combinations of relevant factors in cases where application of the Jones Act is asserted on the one hand and denied on the other makes it possible for us to undertake a restatement of the method of approach and the principles to be applied.

To begin with, as pointed out in Lauritzen, 345 U.S. at page 578, 73 S. Ct. at page 926, "we are simply dealing with a problem of statutory construction." For this reason traditional choice of law techniques may be more misleading than helpful.

In the second place, certain possible interpretations of the Jones Act have already been rejected, and their elimination simplifies the problem. For example, when the question was first presented it might have been held that in the enactment of the Jones Act the Congress intended to exercise the full measure of its power over the subject of the legislation, in which event any contact between the transaction and the United States would have been sufficient to warrant its application. But a contrary view prevailed. See The Paula, 2 Cir., 1937, 91 F.2d 1001, certiorari denied sub nom., Peters v. lauritzen, 302 U.S. 750, 58 S. Ct. 270, 82 L. Ed. 580; O'Neill v. Cunard White Star, 2 Cir., 1947, 160 F.2d 446, certiorari denied 332 U.S. 773, 68 S. Ct. 56, 92 L. Ed. 358.Such inclusiveness was not read into the statute, since it was assumed that the Congress intended the Jones Act to be given a construction in consonance with international maritime law. This meant that not every contact, no matter how ephemeral or fortuitous it might be, would be deemed a basis for applying American law, that is to say the Jones Act. Instead, as commented on in Lauritzen (345 U.S. at page 582, 73 S. Ct. at page 928) "the necessity of mutual forbearance" to avoid international retaliation, and the desire to avoid changing and variant regulations aboard ship, have been stressed. Moreover, the courts might have so construed the Jones Act as to make some particular factor indispensable; but they did not. In other words, even if it appeared that a single special factor of obvious significance was lacking the Jones Act has been held to be applicable despite the absence of such a factor.

Thus the Jones Act has often been applied although the "flag of the ship" was foreign. E.g., Uravic v. F. Jarka Co., 1931, 282 U.S. 234, 51 S. Ct. 111, 75 L. Ed. 312; Gerradin v. United Fruit Co., 2 Cir., 1932, 60 F.2d 927, certiorari denied 287 U.S. 642, 53 S. Ct. 92, 77 L. Ed. 556; Gambera v. Bergoty, 2 Cir., 1942, 132 F.2d 414, certiorari denied 1943, 319 U.S. 742, 63 S. Ct. 1030, 87 L. Ed. 1699. Ownership of the vessel by American citizens was also lacking in the Uravic and Gambera cases.

That the tort need not occur in domestic waters was clearly shown in Panama R. Co. v. Johnson, 1923, 264 U.S. 375, 44 S. Ct. 391, 68 L. Ed. 748; Carroll v. United States, 2 Cir., 1943, 133 F.2d 690; Wenzler v. Robin Line S.S. Co., D.C.W.D. Wash.1921, 277 F. 812. In the Carroll case, supra, and in Torgersen v. Hutton, 2nd Dept. 1934, 243 App.Div. 31, 276 N.Y.S. 348, affirmed 1935, 267 N.Y. 535, 196 N.E. 566, certiorari denied, 1935, 296 U.S. 602, 56 S. Ct. 118, 80 L. Ed. 426, the seaman was neither a citizen nor domiciliary of the United States.

Other contacts such as the place of contract and the origin and destination of the vessel have probably never even been suggested as indispensable.

Nor can a "center of gravity" or "place of most vital connection" approach properly rationalize the decided cases.

Thus in the Uravic and Gambera cases though the flag of the ship and the owners of the vessel were foreign, the American citizenship or domicile of the seaman and the occurrence of the tort in the waters of the United States still led the courts to apply the Jones Act. Yet could anyone doubt that if the ship flew the American flag, without more, the Jones Act would apply? See Lauritzen v. Larsen, supra; O'Neill v. Cunard White Star, Ltd., 2 Cir., 1947, 160 F.2d 446, certiorari denied, 332 U.S. 773, 68 S. Ct. 56, 92 L. Ed. 358; Sonnesen v. Panama Transport Co., 1948, 298 N.Y. 262, 82 N.E.2d 569, certiorari denied, 1949, 337 U.S. 919, 69 S. Ct. 1157, 93 L. Ed. 1729. In this very case the "law of the flag" controlled the determination of the maritime claim. And in Carroll v. United States, 2 Cir., 1943, 133 F.2d 690, and Bobolakis v. Compania Panamena Maritima San Gerassimo, S. A., D.C.S.D. N.Y.1958, 168 F.Supp. 236, American ownership alone was deemed sufficient to apply the Jones Act.*fn1 It is apparent then that the contacts considered most vital in one case are not necessarily of controlling importance in another.

Hence it must be said that in a particular case something between minimal and preponderant contacts is necessary if the Jones Act is to be applied. Thus we conclude that the test is that "substantial" contacts are necessary. And while as indicated supra one contact such as the fact that the vessel flies the American flag may alone be sufficient, this is no more than to say that in such a case the contact is so obviously substantial as to render unnecessary a further probing into the facts.

Some of the advantages of this simple formula are that it states a rational method of ascertaining the congressional intent, and that in its application there is no occasion to consider and "weigh" the contacts that do not exist, nor to go through any process of balancing one set of facts that are present against another set of facts that are absent, without any sure guide as to how the balancing is to be done. Accordingly, the decisional process of arriving at a conclusion on the subject of the application of the Jones Act involves the ascertainment of the facts or groups of facts which constitute contacts between the transaction involved in the case and the United States, and then deciding whether or not they are substantial. Thus each factor is to be "weighed" and "evaluated" only to the end that, after each factor has been given consideration, a rational and satisfactory conclusion may be arrived at on the question of whether all the factors present add up to the necessary substantiality. Moreover, each factor, or contact, or group of facts must be tested in the light of the underlying objective, which is to effectuate the liberal purposes of the Jones Act. We shall now proceed to apply these principles to the case before us.

The basic facts may be briefly stated. The assault took place in the territorial waters of the United States. It matters not that the evidence was conflicting; the finding of the trial judge on this point is certainly not clearly erroneous.

Bartholomew was brought to the United States in 1950 by appellant and taken to Baltimore where he first signed on as a seaman on one of appellant's vessels. Since then he has lived in Brooklyn, New York, where all his personal effects have been located; he made two voyages aboard vessels of appellant other than the Ulysses, worked for Macy's and another concern for about a year, and maintained a bank account in Brooklyn. About three months after the assault, Bartholomew left the United States and proceeded to Puerto Rico, where he remained for two weeks for the sole purpose of obtaining a visa so that he could be eligible to apply for United States citizenship. Promptly upon his return to the United States he signed the usual declaration of intention.

Appellant is a Liberian corporation and the Ulysses flew the Liberian flag. But all the stock of the Liberian corporation is held by a Panamanian corporation, and all the stock of the Panamanian corporation is owned by citizens of the United States. All the officers of appellant are American citizens, its principal place of business is in New York City, and it maintains an office in Liberia as a mere formality to comply with the Liberian statutory requirements.

The articles for the voyage on the Ulysses which was in progress at the time of the assault were signed by Bartholomew in Baltimore. There is no provision in these articles on the subject of what law is to govern in the event of an accident or other occurrence resulting in personal injuries or damage to a seaman. The voyage began in Baltimore and ended in Philadelphia.

We start with the fact that the assault occurred in the territorial waters of the United States. This is undoubtedly a factor of significance, see Lauritzen, 345 U.S. at page 583, 73 S. Ct. at page 928. We have no occasion here to determine whether or not the presence of this factor alone would suffice to make the Jones Act applicable.*fn2

Although appellant contends otherwise, the practice in this type of case of looking through the facade of foreign registration and incorporation to the American ownership behind it is now well established. Gerradin v. United Fruit Co., 2 Cir., 1932, 60 F.2d 927, certiorari denied 287 U.S. 642, 53 S. Ct. 92, 77 L. Ed. 556; Carroll v. United States, 2 Cir., 1943, 133 F.2d 690; Zielinski v. Empresa Hondurena de Vapores, D.C.S.D.N.Y.1953, 113 F.Supp. 93; Torgersen v. Hutton, 2nd Dept. 1934, 243 App.Div. 31, 276 N.Y.S. 348, affirmed, 1935, 267 N.Y. 535, 196 N.E. 566, certiorari denied, 1935, 296 U.S. 602, 56 S. Ct. 118, 80 L. Ed. 426. This is essential unless the purposes of the Jones Act are to be frustrated by American shipowners intent upon evading their obligations under the law by the simple expedient of incorporating in a foreign country and registering their vessels under a foreign flag. See Lauritzen, 345 U.S. at page 587, 73 S. Ct. at page 930. In the case now before us appellant has taken the trouble to insert an additional nominal foreign corporation between the flag and the true beneficial ownership of the vessel. But we have little difficulty in brushing all this aside when considering the applicability vel non of the Jones Act. Complicating the mechanics of evasive schemes cannot serve to make them more effective. What we now do is not to disregard the corporate entity to impose liability on the stockholders, but rather to consider a foreign corporation as if it were an American corporation pursuant to the liberal policies of a regulatory act.*fn3 See Zielinski v. Empresa Hondurena de Vapores, supra, 113 F.Supp. at page 95.

We also think the evidence overwhelmingly establishes that Bartholomew had sufficient presence and intent to be deemed a resident and domiciliary of the United States for the purpose of determining whether or not the Jones Act is applicable. Appellant, however, urges us to rule that the lack of a legal entry for immigration and naturalization purposes precludes us from considering Bartholomew as a "permanent inhabitant" (see Lauritzen, 345 U.S. at page 586, 73 S. Ct. at page 930) in connection with the problem of statutory construction now under consideration. Several cases are cited for this proposition but all of them arose in matters involving various provisions of the statutes affecting immigration and naturalization. E.g., United States ex rel. Bartsch v. Watkins, 2 Cir., 1949, 175 F.2d 245; Del Castillo v. Carr, 9 Cir., 1938, 100 F.2d 338; Taguchi v. Carr, 9 Cir., 1932, 62 F.2d 307; Hurst v. Nagle, 9 Cir., 1929, 30 F.2d 346, certiorari denied 279 U.S. 861, 49 S. Ct. 419, 73 L. Ed. 1001. That there is no basis for analogizing plaintiff's status under strict immigration laws, designed to keep undesirable aliens out of this country, to his status under a broadly worded, liberally construed statute designed for the protection of seamen almost goes without saying. Barber v. Varleta, 9 Cir., 1952, 199 F.2d 419, another immigration case, goes more to the point. There an alien seaman who had entered this country illegally, but who had lived here a number of years, was deemed to have "actually resided" here for the purposes of the Philippine Trade Act, 22 U.S.C.A. § 1251 et seq., and hence was found to be entitled to the benefits of a non-quota immigrant. Similarly, there can be little doubt that for Jones Act purposes plaintiff's actual "resident" status is to be considered apart from the technical legality of such status.

That the factors or contacts just discussed are in the aggregate substantial is clear beyond peradventure of doubt.*fn4 No other conclusion is rationally admissible in the light of the decided cases. Uravic v. F. Jarka Co., 1931, 282 U.S. 234, 51 S. Ct. 111, 75 L. Ed. 312; Gerradin v. United Fruit Co., 2 Cir., 1932, 60 F.2d 927, certiorari denied 287 U.S. 642, 53 S. Ct. 92, 77 L. Ed. 556; Gambera v. Bergoty, 2 Cir., 1942, 132 F.2d 414, certiorari denied, 1943, 319 U.S. 742, 63 S. Ct. 1030, 87 L. Ed. 1699; Carroll v. United States, 2 Cir., 1943, 133 F.2d 690; Zielinski v. Empresa Hondurena de Vapores, supra.

It is true that Lauritzen appears to stress the law of the flag as perhaps the most important factor, but we can perceive no indication whatever in Justice Jackson's opinion of an intention to repudiate the earlier cases just cited. And yet little short of the rejection of all of them would permit us to hold the Jones Act inapplicable in the case before us. Indeed, the discussion in Lauritzen does no more than establish the insubstantiality of the contacts present in that case.

Moreover, this is not a matter resting in the discretion of the trial judge, as seems to have been thought to be the case here. The facts either warrant the application of the Jones Act or they do not.Under 28 U.S.C. § 1331, once federal law is found applicable the court's power to adjudicate must be exercised. While at times the impact of intricate questions of state law may require a federal court to stay its hand, Burford v. Sun Oil Co., 1943, 319 U.S. 315, 63 S. Ct. 1098, 87 L. Ed. 1424, and we need not attempt to catalogue other ...


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