REVISED OCTOBER 16, 2001
IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT
NOOR BEGUM KARIM, Wife of; FAZAL KARIM
Plaintiffs - Appellants - Cross-Appellees
FINCH SHIPPING COMPANY, LTD.; ET AL
FINCH SHIPPING COMPANY, LTD.
Defendant - Appellee - Cross-Appellant
Appeals from the United States District Court
for the Eastern District of Louisiana
September 5, 2001
Before KING, Chief Judge, BARKSDALE, Circuit
Judge, and SCHELL,(1) District Judge.
KING, Chief Judge:
In this maritime personal injury case, both
parties appeal the judgment of the district court. For the following reasons,
I. FACTUAL BACKGROUND
On January 18, 1995, Plaintiff/Appellant/Cross-Appellee
Fazal Karim, a citizen of Bangladesh, was engaged as a seaman aboard the
M/V LOUSSIO, a Panamanian-flag bulk carrier owned by Defendant/Appellee/Cross-Appellant
Finch Shipping Company, Ltd. ("Finch"), a Maltese corporation. While at
sea off the coast of Bermuda, on August 17, 1995, Karim was seriously and
permanently injured when he slipped and fell some twenty to thirty feet
to the bottom of a cargo hold.(2) He endured
severe injuries from his fall: he fractured his lumbar vertebrae; he fractured,
on his left side, his hip, pelvis, leg, ankle, heel, and wrist; he incurred
several herniated discs in his back and neck; and he suffered a detached
retina in his right eye.
During Karim's evacuation out of the hold,
he experienced acute pain. Once in the vessel's infirmary, Karim was administered
aspirin and non-narcotic medication because other pain medications, including
codeine and morphine, had expired. Karim was unable to move and unable
to use the bathroom independently. He remained in this condition for nine
Captain Mohammed Yosuf contacted the international
medical service, C.I.R.M. Medical Italia, by telex for assistance. Although
Captain Yosuf was advised by doctors in Rome to evacuate Karim, Captain
Yosuf could not do so because he was unable to obtain helicopter service
from Bermuda due to an impending tropical storm. Captain Yosuf chose to
proceed past the Bahamas and Florida. Following discussions with the Coast
Guard and C.I.R.M. doctors, he directed the vessel to New Orleans. During
this nine-day voyage, Karim was in excruciating pain, an ordeal that the
district court described as "a window into Hell." Karim v. Finch Shipping
Co. ("Karim I"), 94 F. Supp. 2d 727, 732 (E.D. La. 2000). Upon arrival
in New Orleans, Karim was evacuated by helicopter to Jo Ellen Smith Hospital
in Algiers, Louisiana, where he received extensive medical treatment, including
II. PROCEDURAL HISTORY
On November 30, 1995, Karim and his wife,
Noor Begum Karim, brought suit against Finch and six other parties in the
Civil District Court for the Parish of Orleans, State of Louisiana. Then,
on December 5, 1995, Karim brought suit in the United States District Court
for the Eastern District of Louisiana, seeking to enjoin the Immigration
and Naturalization Service ("INS") from deporting him. He sought this injunction
because of his debilitated condition and urgent need for medical care.
The district court granted Karim's request for a temporary restraining
order against the INS. Subsequently, on December 15, the district court
issued a preliminary injunction preventing Karim's deportation.
Also on December 15, Karim filed an action
in the same federal district court against the M/V LOUSSIO in rem, Finch,
and several other parties. Finch posted a security bond for the vessel
in district court, and it was released on December 21, 1995. Shortly thereafter,
on December 26, 1995, Finch entered an appearance and filed an answer and
In addition, on April 3, 1996, Finch instituted
a separate limitation of liability proceeding pursuant to 46 U.S.C. App.
§ 185(3) in the same district court.
The district court then entered a monition(4)
and concursus(5) in this limitation action,
restraining the prosecution of any state court claims and requiring all
parties with claims against Finch to direct those claims to its court.
Karim filed an answer, contesting Finch's right to limitation of liability
and seeking damages for his injuries under the Jones Act, 46 U.S.C. §
688, and general United States maritime law. On October 16, 1996, after
receiving the appropriate stipulations, the district court stayed the limitation
action, lifted the monition, and permitted Karim to pursue his claims against
Finch in state court, all the while preserving Finch's right to seek limitation
in its court.
In April 1997, the district court granted
Karim's motion to voluntarily dismiss his claims in Karim's federal action
and entered judgment in favor of the defendants, which was subsequently
affirmed by this court. See Karim v. Finch Shipping, No.
97-31027, 177 F.3d 978 (5th Cir. 1999) (unpublished table opinion). Thereafter,
the actions then pending were Karim's state court suit against Finch, and
Finch's federal limitation proceeding.
Also, on April 10, 1997, in another proceeding,
the district court dissolved the preliminary injunction preventing Karim's
deportation because Karim's medical condition had improved and he was capable
of travel. Karim was then returned to Bangladesh.
On July 9, 1997, the state trial court found
that it lacked personal jurisdiction over Finch, and the Louisiana Fourth
Circuit Court of Appeal affirmed. See Karim v. Finch Shipping
Co., 97-2518 (La. App. 4 Cir. 8/26/98), 718 So. 2d 572.(6)
The Louisiana Supreme Court denied review. See Karim v. Finch
Shipping Co., 98-2499 (La. 11/25/98), 729 So. 2d 568.
On June 30, 1998, Finch moved to dismiss voluntarily
its federal limitation action, but the district court denied the motion
because the issues regarding claims against the res and limitation of liability
had been joined. On May 17, 1999, Finch moved to dismiss its claim for
lack of personal jurisdiction, res judicata, and forum non conveniens.
Alternatively, Finch moved for summary judgment on Karim's penalty wage
claim brought pursuant to 46 U.S.C. § 10313. The district court denied
Finch's motion to dismiss, but granted summary judgment in favor of Finch
on the penalty wage claim and dismissed Karim's wife's claims for lack
The district court conducted a trial on Finch's
limitation petition on January 24 and 25, 2000. Additional testimony regarding
the law of Bangladesh was heard on March 20, 2000. On April 14, 2000, the
district court entered its detailed Findings of Fact and Conclusions of
Law in which it made the following rulings: (1) the district court properly
had jurisdiction in the matter; (2) Finch was entitled to limitation, but
not exoneration, of liability; (3) the choice-of-law analysis pointed to
Bangladeshi law; (4) the case was not appropriate for a forum non conveniens
dismissal; (5) Karim was entitled to $63,668.16 for past medical expenses,
$20,000 for future medical expenses, $13,081.28 for past lost wages, $26,451.70
for lost future wages, and $160,000 for general damages (pain and suffering);
(6) Karim was not entitled to nominal, aggravated, or punitive damages;
(7) Karim was entitled to prejudgment interest on past losses (totaling
$176,749.44) at a rate of 5.6% per annum from the date the limitation action
was reactivated in federal court (November 25, 1998) until the date of
the district court judgment (April 14, 2000); and (8) Karim was entitled
to $70,000 for litigation costs, including attorneys' fees. See
Karim I, 94 F. Supp. 2d at 746. The district court denied Karim's
see Karim v. Finch Shipping Co. ("Karim II"),
111 F. Supp. 2d 783, 784-85 (E.D. La. 2000), and Karim timely appealed.
Finch also timely cross-appealed.
III. PROPRIETY OF THE DISTRICT COURT'S
As both Karim and Finch are cross-appealing
almost all aspects of the district court's ruling, we analyze at the outset
those issues presenting threshold matters, which may pretermit the determination
of other points on appeal. Therefore, we address the following issues in
turn: (1) whether the district court properly determined that it had jurisdiction;
(2) whether the district court erred in refusing to dismiss the action
on forum non conveniens grounds; (3) whether the district court erred in
determining a "quantum" for general damages under Bangladeshi law; (4)
whether the district court's general damage award was excessive under Bangladeshi
law; (5) whether the district court erred by failing to apply the codified
general maritime law of Bangladesh -- the Merchant Shipping Ordinance (the
"MSO"); (6) whether the district court erred in granting summary judgment
on the United States penalty wage statute; (7) whether the district court
erred in failing to award maintenance under the employment contract, the
MSO, or the United States general maritime law; (8) whether the district
court erred in its determination of prejudgment interest; and (9) whether
the district court erred in its determinations of litigation costs, including
We provide first a brief background on limitation
of liability actions. Then, we analyze Finch's jurisdictional challenge.
1. Statutory Background
This case concerns the Limitation of Liability
Act of 1851, 46 U.S.C. App. §§ 181-196 (amended 1936) (the "Act").
"The Act was primarily patterned after the English limitation act, 26 Geo.
3, ch. 86 (1786)." Vatican Shrimp Co. v. Solis, 820 F.2d 674, 677
(5th Cir. 1987); see also Just v. Chambers, 312 U.S. 383,
385 (1941) (stating that the limitation of liability statutory provisions
were "enacted in light of the maritime law of modern Europe and of legislation
in England"). The Supreme Court has described the purpose of the Act, stating:
[T]he great object of the [Act] was to encourage
shipbuilding and to induce the investment of money in this branch of industry
by limiting the venture of those who build the ship to the loss of the
ship itself or her freight then pending, in cases of damage or wrong, happening
without the privity or knowledge of the ship owner, and by the fault or
neglect of the master or other persons on board.
Hartford Accident & Indem. Co. v. S.
Pac. Co., 273 U.S. 207, 214 (1927).
The Act provides shipowners two alternative
legal channels to initiate their limitation of liability rights. Under
46 U.S.C. App. § 183,(7) a shipowner
can "set up [limitation] as a defense" by pleading the general substantive
provisions of § 183 in an answer filed in any court, including a state
court. See Langnes v. Green, 282 U.S. 531, 543 (1931). However,
when the "right of [the shipowner] to a limited liability [is] brought
into question . . . [it brings the action] within the exclusive power of
a court of admiralty." Id. at 542.
The shipowner's second option is to file a
limitation petition in federal district court under 46 U.S.C. App. §
185.(8) The 1936 Amendments to the Act added
the requirement that the shipowner must file such a petition "within six
months after a claimant shall have given to or filed with such owner written
notice of claim." 46 U.S.C. App. § 185. This six-month time limit
is not found in § 183. If the shipowner chooses to file a § 185
petition, the shipowner also must post a bond "equal to the amount or value
of the interest of such owner in the vessel and freight" with the district
court. See id.
The procedure provided for in § 185 is
known as a "concursus," and the purpose behind such a proceeding in federal
court is to permit all actions against the shipowner to be consolidated
into a single case so that all claims may be disposed of simultaneously:
"When a shipowner files a federal limitation action, the limitation court
stays all related claims against the shipowner pending in any forum, and
requires all claimants to timely assert their claims in the limitation
court."(9) Magnolia Marine Transp. Co.
v. Laplace Towing Corp., 964 F.2d 1571, 1575 (5th Cir. 1992). "The
court takes jurisdiction to entertain those claims without a jury and ensures
that the shipowner who is entitled to limitation is not held to liability
in excess of the amount ultimately fixed in the limitation suit (the limitation
fund)." Id. (internal citations omitted). As the Supreme Court explained:
[In essence, the § 185 proceeding] is
the administration of equity in an admiralty court. . . . [The proceeding]
looks to a complete and just disposition of a many cornered controversy,
and is applicable to proceedings in rem against the ship as well as to
proceedings in personam against the owner, the limitation extending to
the owner's property as well as to his person.
Hartford, 273 U.S. at 216 (emphasis
and internal citations omitted).
2. Jurisdictional Analysis
"We review jurisdictional determinations de
novo." Hidden Oaks Ltd. v. City of Austin, 138 F.3d 1036, 1041
(5th Cir. 1998); see also Groome Res. Ltd., L.L.C. v. Parish
of Jefferson, 234 F.3d 192, 198 (5th Cir. 2000) ("Jurisdiction is a
question of law which we review de novo.").
The Supreme Court has clearly stated: "The
jurisdiction of the admiralty court attaches in rem and in personam by
reason of the custody of the res put by the petitioner into its hands."
Hartford, 273 U.S. at 217 (emphasis omitted). "The court of admiralty,
in working out its jurisdiction, acquires the right to marshal all claims,
whether of strictly admiralty origin or not, and to give effect to them
by the apportionment of the res and by judgment in personam against the
owners, so far as the court may decree." Id. (emphasis omitted);
see alsoJust, 312 U.S. at 386 (stating that a court of admiralty
in a limitation proceeding "may furnish a complete remedy for the satisfaction
of [all] claims by distribution of the res and by judgments in personam
for deficiencies against the owner, if he is not released by virtue of
that statute" (emphasis omitted))(10);
The Chickie, 141 F.2d 80, 84 (3d Cir. 1944). The Supreme Court has
also stated that the admiralty court retains its jurisdiction regardless
of how the limitation issue is resolved. See Just, 312 U.S.
at 386-87; Hartford, 273 U.S. at 220.
As these statements by the Supreme Court indicate,
we do not confront this issue res nova. Although Finch repeatedly
asserts that it is a novel question whether a shipowner "waives" its jurisdictional
defenses by filing a "defensive" limitation of liability petition, as explained
above and further discussed below, Finch's characterization of the question
is inaccurate, and the question itself is not novel.
Finch's argument rests on its assertion that
it had a right under federal law to invoke a concursus and a statutory
right to seek limitation of liability in federal court. Finch claims that
it was "compelled" to file a petition under 46 U.S.C. App. § 185 within
the provision's six-month time limitation; otherwise, it would have forfeited
its access to limitation of liability. Finch argues that its limitation
action was therefore "defensive" in nature and filed only in response to
Karim's state court action, which sought damages in excess of the value
of the vessel. In essence, Finch is claiming that, under the district court's
ruling, shipowners face a Hobson's choice -- i.e., forego their in personam
jurisdiction defense, guaranteed by the Due Process clause, or risk the
possible loss of their right to seek limitation of liability.
We do not agree. Finch is not facing a so-called
"Hobson's choice." Rather, Finch is simply attempting to invoke the protections
of a federal court without fulfilling its concomitant responsibility as
a result of that invocation. If a shipowner wishes to contest the jurisdiction
of a United States court, it has every right to do so. However, if the
shipowner wishes to avail itself of the benefits offered by this forum
(here, a limitation of liability action), then it cannot complain that
the court had no power over it.(11) By
invoking the statutory opportunity to limit its liability, the shipowner
consents to the jurisdiction of the court. As the district court succinctly
stated: Finch voluntarily provided the district court in rem jurisdiction
by commencing the limitation petition and placing the res, or the bond,
in the hands of the court, and Finch invoked the powers of the court to
require Karim to halt his proceeding in another forum and to file in the
limitation action.(12) Finch cannot now
be permitted "to abandon its limitation proceeding without prejudice and
quietly float away." Karim I, 94 F. Supp. 2d at 734.
Moreover, Finch's argument that the district
court did not retain jurisdiction because Karim chose to proceed in state
court, which subsequently dismissed his claims for lack of jurisdiction,
"misses the mark." Id.
Karim's claims in state court were in personam
claims. The state court did not consider the merits of the claims and only
held that it had no in personam jurisdiction. The limitation proceeding
in [the district court], however, is an in rem proceeding. . . . The fact
that a state court . . . lacks in personam jurisdiction does not deprive
[the district court] of its in rem jurisdiction.
Id. (emphasis omitted). We agree with
the district court, which stated, relying upon Just and Hartford,
that it had "a responsibility to provide a complete remedy to satisfy the
answers and claims filed in Finch's limitation proceeding pursuant to its
requested monition." Id.
Finch also argues that The Bremen v. Zapata
Off-Shore Co., 407 U.S. 1 (1972), and World Tanker Carriers Corp.
v. M/V YA MAWLAYA, 1996 WL 20874 (E.D. La. Jan. 18, 1996), rev'd,
99 F.3d 717 (5th Cir. 1996), support its position that the filing of a
defensive limitation action should not operate to deprive a shipowner of
an in personam jurisdiction defense. Again, Finch's arguments are unpersuasive.
In Bremen, the Supreme Court held that
a forum selection clause was prima facie valid and that it "should control
absent a strong showing that it should be set aside" and remanded the case
for a determination whether the clause was unreasonable and unjust or invalid.
See 407 U.S. at 15. The clause in
Bremen stated that disputes
were to be resolved in London, England. The Court stated that the filing
of a limitation complaint in a United States federal court did not nullify
the prima facie validity of the forum selection clause, focusing on the
"defensive" nature of the limitation proceeding. See id.
at 19-20. Finch thus claims that the result in Bremen "would not
have been possible if the filing of a defensive limitation action irrevocably
subjects the res to the jurisdiction of the court."
Finch attempts to extend the Bremen
holding to argue that a "defensive" limitation proceeding does not definitively
submit the shipowner to the jurisdiction of the United States court. Such
an extension is untenable because it conflicts with Hartford and
is unsupported because the Bremen Court did not limit Hartford
in any fashion. We note first that the
Bremen Court was primarily
motivated by its desire to temper the hostility toward forum selection
clauses, particularly at a time when international transactions and agreements
were beginning to expand. See Bremen, 407 U.S. at 9, 15 (stating
that forum selection clauses "have historically not been favored by American
courts" and that "in the light of present-day commercial realities and
expanding international trade" such hostility could not be sanctioned).
The Court also emphasized that the "choice of . . . forum was made in an
arm's-length negotiation by experienced and sophisticated businessmen."
Id. at 12; see also id. at 17 (stating that the case
"involves a freely negotiated international commercial transaction between
a German and an American corporation").
Furthermore, the Court did not state
that the federal district court did not have jurisdiction over the action
(or that the parties could now assert an in personam jurisdiction defense);
rather, it stated that the district court should not have exercised
that jurisdiction: "The threshold question is whether [the district] court
should have exercised its jurisdiction to do more than give effect to the
legitimate expectations of the parties, manifested in their freely negotiated
agreement, by specifically enforcing the forum clause." Id. at 12.
So, while the res established federal court jurisdiction, the district
court in Bremen should have, in its discretion, chosen not to exercise
Finch's reliance on this court's decision
in World Tanker, which dealt with Federal Rule of Civil Procedure
4(k)(2), is similarly flawed. "Rule 4(k)(2) . . . sanctions personal jurisdiction
over foreign defendants for claims arising under federal law when the defendant
has sufficient contacts with the nation as a whole to justify the imposition
of United States' [sic] law but without sufficient contacts to satisfy
the due process concerns of the long-arm statute of any particular state."
World Tanker Carriers Corp. v. MV YA MAWLAYA, 99 F.3d 717, 720 (5th
Cir. 1996) (emphasis omitted). Reversing the district court, this court
held that admiralty cases fell within the ambit of Federal Rule of Civil
Procedure 4(k)(2). See id. at 723.
Finch states that the World Tanker
district court rejected the argument that a shipowner had submitted to
the jurisdiction of the federal court by filing its limitation action and
by submitting a letter of undertaking. Finch argues further that, on appeal,
this court did not disturb the district court's holding that the filing
of the limitation was a solely defensive measure that did not subject the
shipowner to the jurisdiction of the court, but that this court reversed
and remanded for a consideration of the shipowner's national contacts pursuant
to Rule 4(k)(2). Finch asserts that this remand would have been unnecessary
if this court had concluded that the voluntary filing of a defensive limitation
action subjects the shipowner to either in rem or in personam jurisdiction.
First, we note that the reversed district
court in World Tanker appears to cite incorrectly to Bremen.
supra in this section, Bremen did not state
that a limitation action was insufficient to confer jurisdiction, but only
that in some cases (such as those involving a valid forum selection clause),
courts should employ their discretion not to exercise their jurisdiction.
Moreover, the World Tanker district court did not mention the Supreme
Court's Hartford decision. In reversing and remanding, this court
explicitly did not address the jurisdiction issue with regard to the limitation
proceeding. See World Tanker, 99 F.3d at 724.(13)
We will not ignore the explicit dictates of long-established Supreme Court
precedent on such a flimsy (if not nonexistent) reed.
In sum, we are faced with a situation in which
Finch filed a limitation proceeding and placed the res in the hands of
the court, let the proceeding pend for four years, made use of the concursus
and monition, utilized the district court for its own interests by, for
example, attempting to maintain a multi-claimant action by itself filing
claims against other parties and opposing Karim's access to other courts,
and then after the vessel was sold (and the company defunct), filed a motion
to dismiss the limitation action on the basis of personal jurisdiction
and forum non conveniens.(14) When the
instant United States laws cease to be of use, a party cannot extinguish
the proceedings. Shipowners cannot avail themselves of the benefits under
United States laws, but then refuse to bear the possible burdens under
B. Forum Non Conveniens
"The forum non conveniens determination is
committed to the sound discretion of the trial court. It may be reversed
only when there has been a clear abuse of discretion; where the
court has considered all relevant public and private interest factors,
and where its balancing of these factors is reasonable, its decision deserves
substantial deference." Piper Aircraft Co. v. Reyno, 454 U.S. 235,
257 (1981) (emphasis omitted and added); see also McLennan v.
Am. Eurocopter Corp., 245 F.3d 403, 423 (5th Cir. 2001) ("We review
the district court's denial of a motion to dismiss for forum non conveniens
for a clear abuse of discretion.").
The "doctrine of forum non conveniens proceed[s]
from [the] premise [that] . . . [i]n rare circumstances, federal courts
can relinquish their jurisdiction in favor of another forum." Quackenbush
v. Allstate Ins. Co., 517 U.S. 706, 722 (1996) (emphasis omitted).
This doctrine enables a court to decline to exercise its jurisdiction if
the moving party establishes that the convenience of the parties and the
court and the interests of justice indicate that the case should be tried
in another forum. Building upon its previous case in
Gulf Oil Corp.
v. Gilbert, 330 U.S. 501 (1947), the Supreme Court set out the framework
for analyzing forum non conveniens in an international context in Piper
Aircraft. First, "the court must determine whether there exists an
alternative forum." Piper Aircraft, 454 U.S. at 254 n.22. Second,
the court must determine which forum is best suited to the litigation.
See id. at 255.
The following factors are generally considered
in the first step: (1) amenability of the defendant to service of process
and (2) availability of an adequate remedy in the alternative forum. See
id. at 254-55 n.22; see also McLennan, 245 F.3d at
424. In performing the second step, a court must consider whether "certain
private and public interest factors weigh in favor of dismissal." McLennan,
245 F.3d at 424.(15)
The district court concluded that, although
Finch had made a timely motion to dismiss for forum non conveniens, the
court could not consider the motion until the limitation issue (which depended
upon United States law) had been decided. See Karim I, 94
F. Supp. 2d at 736-37. After resolving the limitation question, the district
court performed the familiar Gulf Oil/Piper Aircraft forum
non conveniens analysis and determined that the private and public interest
factors demonstrated that no other forum was adequate, available, or more
convenient than the current one.
Finch claims that the district court erred
in refusing to dismiss the action on forum non conveniens grounds primarily
because it delayed consideration of the motion until the resolution of
the limitation issue. By doing so, Finch asserts that the district court
permitted the creation of the very factors upon which it later relied to
find that another forum was not appropriate.
We note at the outset that the district court
was perhaps generous in characterizing Finch's forum non conveniens motion
as "timely." To be clear, Finch filed its first such motion in response
to Karim's federal civil suit (which was eventually dismissed without prejudice).
The district court deferred ruling on the motion to allow Karim to conduct
discovery on the matter. A few months after this first forum non conveniens
motion, Finch then instituted its limitation proceeding (the one
before us on appeal). Although Finch stated in its limitation petition
that it was reserving a forum non conveniens defense, it did not file a
motion to dismiss based on those grounds until approximately three years
later, on May 17, 1999. Finch claims that this delay was attributable to
Karim's efforts to litigate in state court. However, even assuming arguendo
that the state litigation interfered with Finch's motion, Finch does not
explain why it did not urge the forum non conveniens motion in the time
period between its filing of the limitation petition (April 3, 1996) and
the district court's authorization for Karim to litigate in state court
(October 16, 1996).
In any case, the district court's ultimate
refusal to dismiss on forum non conveniens grounds was not a clear abuse
of discretion. Although the district court may have given the impression
in some of its statements that courts are always obligated to resolve the
limitation action before the forum non conveniens issue, the court's ultimate
resolution of the forum non conveniens issue is unaltered, as we explain
When limitation of liability proceedings and
forum non conveniens intersect, the limitation issue is simply taken as
yet another factor to consider in the well-established Gulf Oil/Piper
Aircraft framework. First, this approach fits within the traditional
forum non conveniens test -- i.e., Gulf Oil made clear that the
factors to be considered in the analysis were not exclusive to the ones
it set out. See Gulf Oil, 330 U.S. at 508; see also
Piper Aircraft, 454 U.S. at 249-50. And second, this approach also
harmonizes with the few reported decisions facing a forum non conveniens
issue in the context of a limitation proceeding -- i.e., some courts have
dismissed the limitation action based on forum non conveniens and some
have not, depending on the circumstances involved. See, e.g.,
P'ship, L.P. v. Bankers Tr. Co., Nos. 96 CIV. 1970 (MBM), 96 CIV. 2222
(MBM), available at 1997 WL 45521, at *15 (S.D.N.Y. Feb. 4, 1997)
(denying the motion to dismiss on the basis of forum non conveniens and
citing, among others, In re Maritima Aragua, S.A., 823 F. Supp.
143 (S.D.N.Y. 1993), which involved various claims in the context of a
limitation proceeding); In re Am. President Lines, Ltd., 890 F.
Supp. 308, 318 (S.D.N.Y. 1995) (denying the motion to dismiss on the basis
of forum non conveniens); In re Maritima Aragua, S.A., 823 F. Supp.
143, 150-51 (S.D.N.Y. 1993) (same). But see In re Geophysical
Serv., Inc., 590 F. Supp. 1346, 1361 (S.D. Tex. 1984) (dismissing the
action on forum non conveniens grounds).
As for the "limitation proceeding" factor
in the forum non conveniens inquiry, we agree with the district court that
United States law governed the limitation action. United States courts
"must apply foreign limitation law if the substantive liability of the
parties is governed by a foreign law and if the limitation law of
the foreign country is such an integral part of the substantive law governing
the action that it can be said to 'attach' to the substantive liability
law." Korea Shipping Corp. v. Tokio Marine & Fire Ins. Co.,
919 F.2d 601, 604-05 (9th Cir. 1990) (citing Black Diamond S.S. Corp.
v. Robert Stewart & Sons, Ltd. (The Norwalk Victory), 336 U.S.
386, 395 (1949)). "If either of the two conditions is not met, then U.S.
courts apply the rule in [Oceanic Steam Navigation Co. v. Mellor (The
Titanic), 233 U.S. 718 (1914)]: U.S. limitation law controls." Id.
In this case, Bangladeshi law was found to
be the applicable substantive law, a determination that neither party strongly
disputes on appeal.(16) However, Finch
did not offer any evidence or make any argument that Bangladeshi limitation
law even existed, much less that it is so integral that it "attached" to
the substantive liability law. Finch did not contest at any point the determination
that the "law of the forum" rule, based on Mellor, dictated that
United States law applied to its limitation proceeding.(17)
This determination informs the consideration
of the forum non conveniens inquiry. In addition to private and public
interest factors, such as Karim receiving medical treatment in the United
States, evidence and testimony being easily accessible in this forum, and
counsel for both parties being based in this forum, the fact that United
States limitation law applies also weighs against dismissal. See, e.g.,
Argonaut P'ship, 1997 WL 45521, at *15 (stating that "courts have
denied forum non conveniens motions where a related action, requiring much
of the same evidence, was pending also in the jurisdiction and could not
be dismissed"); Maritima Aragua, 823 F. Supp. at 147 (denying a
motion to dismiss on the basis of forum non conveniens and stating that
the "crucial factor in the case at bar [was] the presence of the Limitation
Proceeding brought by the [shipowners]"); id. at 150-51; see
also Am. President Lines, 890 F. Supp. at 318 (holding that
the doctrine of forum non conveniens did not compel dismissal of related
actions for limitation of vessel owners' liability); Geophysical Serv.,
590 F. Supp. at 1357, 1361 (finding the Canadian limitation act applicable
and dismissing the action on the basis of forum non conveniens).(18)
As we have recently stated, "[t]he district
court's analysis . . . is consistent with the procedural framework [of
Oil/Piper Aircraft that] the district court is obligated to
use. Moreover, there is nothing unreasonable about the conclusions reached
therein. Thus, there is no abuse of discretion and no reversible error
arising from the district court's denial of . . . [the] motion to dismiss
for forum non conveniens." McLennan, 245 F.3d at 425 (footnote omitted).
C. Quantum for General Damages Under Bangladeshi
As stated above, the district court determined
that the substantive law of Bangladesh should apply to Karim's claims.
It then determined the appropriate measure of Karim's damages (i.e., quantum)
under Bangladeshi law. Because of the dearth of reported Bangladeshi cases
on quantum in tort, the district court looked to English and Indian precedent
for guidance. The district court found that under Indian jurisprudence,
a general damage award for pain and suffering would be approximately in
the range of U.S. $50,000 and U.S. $100,000 for Karim's type of injuries.
The court also stated that each case depended on its own unique facts and
circumstances and chided Karim for falsely assuming that general damages
can be measured without regard to context. The district court thoroughly
analyzed all available information and awarded Karim a total of Taka 8,000,000
Karim objects to this determination, arguing
that Federal Rule of Civil Procedure 44.1 requires that the party asserting
application of foreign law demonstrate the applicability of the foreign
law to the court. Karim states that Finch has not established Bangladeshi
law as to quantum, which is evident by the district court's resort to other
nations' caselaw.(19) Describing the policies
underlying this requirement, he states further that, absent sufficient
proof of foreign law, the court shall apply the law of the forum (in this
case, that of the United States). As such, he faults the district court
for entering into a "contextual analysis" of Indian and English jurisprudence,
which, he claims, is both subjective and inaccurate.
"We review questions regarding foreign law
de novo. This analysis is plenary." Banco de Credito Indus.,
S.A. v. Tesoreria Gen., 990 F.2d 827, 832 (5th Cir. 1993) (internal
quotations and citations omitted). "When the parties have failed to conclusively
establish foreign law, a court is entitled to look to its own forum's law
in order to fill any gaps." Id. at 836; see also 9 Charles
Alan Wright & Arthur R. Miller, Federal Practice and Procedure §
2447 (1995) (stating that when foreign law cannot be ascertained, the district
court might reconsider its initial decision to apply foreign law and decide
instead to apply domestic law (citing, inter alia,
Shipyards, Ltd. v. Clark, 365 F.2d 464, 468 n.5 (5th Cir. 1966))).
Following the trial on the liability and limitation
phase of the case, the district court held a trial on the quantum aspect
of the matter. There were only two published Bangladeshi tort cases available
to the district court, and neither was directly relevant to the quantum
issue at hand. The district court also heard testimony and argument from
four expert witnesses, and the court found these witnesses to be knowledgeable
as to the laws of Bangladesh, India, and the United Kingdom.(20)
These experts informed the court that Bangladeshi courts would look to
Indian and British cases for guidance.(21)
Thus, Finch marshaled as much information
as possible to illuminate what a Bangladeshi court might do under these
circumstances. This case is distinguishable from, for example,
Libanaise Pour Le Commerce v. Khreich, 915 F.2d 1000, 1006-07 (5th
Cir. 1990), in which the party championing Abu Dhabi law did not call any
expert witnesses and only provided the court with a copy of a statute and
general materials. Finch met its obligations, and the district court had
sufficient information upon which to make its quantum determination. Therefore,
the district court did not err in making a determination of quantum under
Bangladeshi law by applying English and Indian precedent.
D. General Damages
As noted above, the district court awarded
Karim $160,000 in general damages. Finch contests this determination, asserting
that the award was excessive under Bangladeshi law. Finch argues that the
district court's award is akin to awarding an American plaintiff in excess
of $9 million. Finch asserts further that its expert opined, based on Indian
cases, that a Bangladeshi court would award damages in the range of Taka
250,000 (U.S. $5,000).
Karim responds that Finch's analysis ignores
its own expert's testimony regarding British cases and focuses only on
Indian caselaw. He also points out that the only reported Bangladeshi case
regarding personal injury did not refer to Indian cases, but to British
precedent. In essence, this is Karim's argument in the alternative -- i.e.,
that if we find that quantum was appropriately determinable under Bangladeshi
law and not excessively low, Karim argues that the amount is not excessively
Based on the information in the record and
in the district court's thorough opinion, we conclude that the court did
not err in setting the amount of general damages under Bangladeshi law
to be U.S. $160,000.(22) See Karim
I, 94 F. Supp. 2d at 740-43.
E. Application of the Merchant Shipping
The district court found that the MSO (the
codified general maritime law of Bangladesh) did not apply to Karim's service
aboard the vessel because MSO § 1(4) states that the MSO only applies
to (1) Bangladeshi ships, (2) ships registered under the MSO, (3) ships
licensed under the MSO in coasting trade while engaged in such trade, and
(4) all other ships while in port or within the territorial waters of Bangladesh.(23)
See Karim I, 94 F. Supp. 2d at 744. Thus, because it had
determined that the MSO was inapplicable in this case, the district court
held that the MSO requirements, such as the penalty wage provision, were
also inapplicable. See id.
Disagreeing with the district court, Karim
argues that the MSO does apply because of the clear language in the Shipping
Articles (his contract with Finch), which stated that the Articles were
"made pursuant to" the MSO. Karim also points to the testimony of Finch's
expert in which the expert stated: "The provisions of the Shipping Articles
are governed by [the] MSO." Finally, Karim asserts that several provisions
of the Shipping Articles specifically refer to various MSO provisions.
As the district court correctly stated, the
vessel in this case does not fit into any one of the four categories of
MSO § 1(4). The Shipping Articles do state that they were "made pursuant
to" the MSO. The plain reading of the terms "made pursuant to" indicates
that the more reasonable interpretation is the one for which Finch argues
-- i.e., that the Shipping Articles fulfill the required elements of the
MSO (and not that the Shipping Articles mandate that all the MSO requirements
be applicable to the seaman). This interpretation also does not create
conflict with § 1(4).
Therefore, the district court did not err
in determining that the MSO is inapplicable in this case.
F. The United States Penalty Wage Statute
Factual determinations regarding the penalty
wage statute are "subject to the clearly erroneous standard of review."
Castillo v. Spiliada Mar. Corp., 937 F.2d 240, 243 (5th Cir. 1991).
"The Seamen's Wage Act, 46 U.S.C. § 10313,
protects seafarers by ensuring they receive timely payment of wages." Mateo
v. M/S KISO, 41 F.3d 1283, 1289 (9th Cir. 1994) (internal quotations
and citations omitted). The statute explicitly applies to foreign seamen
in United States ports. See 46 U.S.C. § 10313(i) (2001). As
such, their wages are necessarily determined by the foreign law under which
they were paid (in this case, Bangladeshi law). Cf. Mateo,
41 F.3d at 1290 (stating that "defendants acted in good faith by abiding
with the dictates of Philippine law and long-standing custom in paying
off the seamen after they had returned to the Philippines").
On June 23, 1999, the district court orally
granted Finch summary judgment on Karim's claim regarding the United States
penalty wage statute. Denying Karim's request for reconsideration of this
ruling, the district court reiterated its statement from the initial hearing
that Karim's "assertions of disputed facts [as to owed wages] . . . , unsupported
by competent evidence, are not sufficient to survive a motion for summary
judgment." Karim v. Finch Shipping Co., No. CIVA954169REF, available
at 1999 WL 605481, at *1 (E.D. La. Aug. 11, 1999). The court also stated
that the newly proffered affidavit for reconsideration would be disregarded
because it was untimely (given that Karim had over three years to adduce
evidence on this issue). See id. The district court further
stated that "Karim was unable to offer any credible factual dispute to
Finch's contention that all wages for work he had actually performed were
paid upon his discharge." Id.
We find no fault with the district court's
disposition of Karim's claim in this regard. We also note that Karim's
argument on appeal that his right to wages has been established by the
MSO and the Shipping Articles is unavailing: we have upheld the district
court's determination that the MSO is inapplicable, see supra
Part III.E, and we also agree with the district court's determination that
Karim was not owed wages under the Shipping Articles, see Karim
I, 94 F. Supp. 2d at 744 n.10. Thus, there is no debt for wages under
Bangladeshi law upon which Karim could base a claim for penalty wages.
Therefore, the district court did not err in granting summary judgment
on Karim's claim under the United States penalty wage statute in favor
G. Maintenance Under the Employment Contract,
Shipping Ordinance, or the United States
General Maritime Law
Karim claims that his contract with Finch,
i.e., the Shipping Articles, provide that, if he is injured, Finch would
pay his maintenance expenses until his return to Bangladesh. He also states
that the MSO and United States general maritime law impose similar requirements.
In fact, under United States law, a shipowner is required to pay the maintenance
expenses of an injured seaman until he reaches maximum medical improvement.
Karim asserts that he provided undisputed testimony that he incurred such
expenses in the amount of $34,900.
The district court did not explicitly address
this claim, likely because Karim did not prove the amount of maintenance
to which he was entitled. Although Karim refers to his maintenance expenses
in some portions of his testimony at the bench trial, we have been unable
to locate the $34,900 figure in the record. As such, this claim is not
properly before us.(24)
H. Prejudgment Interest
The district court noted first that the limitation
action was stayed at Karim's request so that he could pursue his claims
in state court. See Karim I, 94 F. Supp. 2d at 745. The court
then held that prejudgment interest should commence from the date the limitation
action was reactivated in the federal court. See id.
Karim disputes this determination, stating
that interest should have been awarded from the date of his injury. Karim
maintains that the district court based its decision on the erroneous premise
that the renewal of his state court action operated as a stay of the limitation
proceeding. Karim argues that the district court's order permitting Karim
to pursue state court litigation did not prohibit Finch from proceeding
with its limitation action.
As the district court correctly stated, the
award of prejudgment interest is discretionary (both under Bangladeshi
and United States law). See id. Under this standard, we find
that the district court did not abuse its discretion in setting the initial
date of the interest accrual to be the date this limitation action was
reactivated in federal court.
I. Litigation Costs, Including Attorneys'
The district court stated that, under Bangladeshi
law, litigation costs, including attorneys' fees, are discretionary and
depend in large part on the counsel's effort and the outcome of the litigation.
The court also noted that contingency fees are disfavored in Bangladesh,
and attorneys' fees are to be based upon the work of the attorney. As such,
the district court concluded that Karim should be awarded litigation costs,
including attorneys' fees, in the amount of $70,000.
Karim complains that the district court provided
no analysis and summarily determined the amount of the award. Karim asserts
that this court has previously remanded and required a district court to
prove its reasons in awarding attorneys' fees. Karim fails to mention that
the cases it cites concerned fees awarded under United States law. Karim
goes on to state that the unilateral award was in direct contravention
of the understanding between the parties and the court (i.e., that should
the court determine that Karim was entitled to attorneys' fees and costs,
the amount would be determined by referral to a magistrate judge). Such
a referral is also in line with Bangladeshi law, which provides trial courts
with the discretion to refer fee determinations to magistrates. Karim points
out that the record demonstrates that attorneys' fees alone in this case
are over $200,000 and that the costs are substantial. Karim argues that
the amount received is so low as to constitute an abuse of discretion.
Finally, Karim argues that he is entitled
to costs pursuant to Rule 54(d)(1) and 28 U.S.C. § 1920, regardless
of the fact that foreign law governed the underlying claims. He points
out that the district court's decision is ambiguous regarding whether the
amount awarded included Rule 54(d)(1) and § 1920 costs. At a minimum,
he requests that this court enter an order clarifying that he is entitled
to file a motion to recover costs under Rule 54(d)(1) and § 1920.
Although there may have been an "understanding"
that a fees and costs determination would be referred to a magistrate judge,
a district court is not required to make such a referral. While such an
action may assist in assessing the amount to be awarded, a district court
may rely on the record before it. Therefore, an alleged contravention of
this "understanding" is not per se error. In addition, the district
court set out the factors guiding its discretion as to the award of attorneys'
fees and litigation costs.
The short answer to Karim's claim regarding
his entitlement to costs recoverable under Rule 54(d)(1) and § 1920
is that Karim never filed a bill of costs in the district court or in any
way raised his entitlement to those costs in the district court.
For the foregoing reasons, we AFFIRM the judgment
of the district court. Each party shall bear its own costs.
1. District Judge of the
Eastern District of Texas, sitting by designation.
2. The district court sets
forth the details of Karim's fall in its opinion. See Karim v.
Finch Shipping Co., 94 F. Supp. 2d 727, 731-32 (E.D. La. 2000).
3. See infra
4. See infra
5. See infra
text preceding note 8.
6. We note that the Louisiana
Fourth Circuit Court of Appeal in a subsequent case held that it should
not have considered the issue on the merits in Karim. See
Jackson v. America's Favorite Chicken Co., 98-0605 (La. App. 4 Cir.
2/3/99), 729 So. 2d 1060, 1065 (stating that an appeal from a partial summary
judgment that lacks requisite designation by the trial court or an agreement
of the parties to that effect may not be converted to a supervisory writ
and then considered on the merits and overruling the procedure in Karim).
7. 46 U.S.C. App. §
183 states in relevant part:
(a) Privity or knowledge of owner; limitation
The liability of the owner of any vessel,
whether American or foreign, for any embezzlement, loss, or destruction
by any person of any property, goods, or merchandise shipped or put on
board of such vessel, or for any loss, damage, or injury by collision,
or for any act, matter, or thing, loss, damage, or forfeiture, done, occasioned,
or incurred, without the privity or knowledge of such owner or owners,
shall not, except in the cases provided for in subsection (b) of this section,
exceed the amount or value of the interest of such owner in such vessel,
and her freight then pending.
46 U.S.C. App. § 183 (Supp. 2001).
8. 46 U.S.C. App. §
The vessel owner, within six months after
a claimant shall have given to or filed with such owner written notice
of claim, may petition a district court of the United States of competent
jurisdiction for limitation of liability within the provisions of this
chapter and the owner (a) shall deposit with the court, for the benefit
of claimants, a sum equal to the amount or value of the interest of such
owner in the vessel and freight, or approved security therefor, and in
addition such sums, or approved security therefor, as the court may from
time to time fix as necessary to carry out the provisions of section 183
of this title, or (b) at his option shall transfer, for the benefit of
claimants, to a trustee to be appointed by the court his interest in the
vessel and freight, together with such sums, or approved security therefor,
as the court may from time to time fix as necessary to carry out the provisions
of section 183 of this title. Upon compliance with the requirements of
this section all claims and proceedings against the owner with respect
to the matter in question shall cease.
46 U.S.C. App. § 185 (1958).
9. The admiralty court's
order in this regard is commonly referred to as a "monition."
10. We note that Shaffer
v. Heitner, 433 U.S. 186 (1977), does not cast doubt upon the statements
in Hartford and Just that the admiralty court also has "in
personam" jurisdiction via the res. In Shaffer, the Supreme Court
held that the requirements for "quasi in rem" and "in personam" jurisdiction
are identical - i.e., the standard set forth in
International Shoe Co.
v. Washington, 326 U.S. 310 (1945), and its progeny. See Shaffer,
433 U.S. at 212. Quasi in rem jurisdiction refers to a court obtaining
in personam jurisdiction via property located in the jurisdiction.
In cases such as the present one, the limitation
petitioner voluntarily and personally places the res in the hands of the
court. This situation is unlike the scenario in
Shaffer in which
the property located in the jurisdiction was unrelated to the lawsuit and
was not placed in the hands of the court by the party itself. Moreover,
in Burnham v. Superior Court of California, 495 U.S. 604 (1990),
the Supreme Court declined to extend Shaffer and admonished the
petitioner for "wrenching" its statements in Shaffer out of context.
Seeid. at 619-21.
We also note that, in the case before us,
a judgment in excess of the res is not at issue.
11. This is so even with
our decision in Vatican Shrimp Co. v. Solis, 820 F.2d 674 (5th Cir.
1987). Vatican Shrimp held that a "defensive pleading in the state
court answer [does] not provide the federal court with jurisdiction to
hear the shipowner's limitation claim." Id. at 677. The consequence
of this holding is that a shipowner cannot always rely upon raising limitation
in a state court answer because, once the limitation is contested, it falls
within the exclusive jurisdiction of a federal admiralty court. As such,
if a shipowner has not filed its § 185 petition within the six-month
time frame, it forfeits that defense. In order to ensure access to limitation
of liability, shipowners must therefore file § 185 petitions in federal
court to account for the possibility that the petitions may be contested.
Finch asserts that, because of Vatican Shrimp, it is essentially
required to file a § 185 petition.
However, as stated in the text, Finch is not
"required" to take advantage of defenses offered under federal statutes;
its action is voluntary in that it made a strategic choice to avail itself
of a United States statutory defense to limit its liability. Once again,
if Finch wishes to take advantage of a benefit offered by United States
laws, it cannot be heard to complain (after the need for the defense may
have evaporated) that the very United States court it voluntarily petitioned
and utilized had no power over it.
12. As recently as December
1998, Finch invoked the protections of the district court. The district
court denied additional claims by Karim in federal court because of the
monition and concursus entered by the district court on Finch's behalf.
13. While the facts as
set forth in the World Tanker case do not indicate the precise nature
of the limitation action, it is possible that the jurisdiction was not
perfected. The World Tanker district court cited to Panaconti
Shipping Co., S.A. v. M/V YPAPANTI, 865 F.2d 705, 708 (5th Cir. 1989),
for the proposition that the letter of undertaking was insufficient to
trigger in rem jurisdiction. See World Tanker, 1996 WL 20874,
at *1. However, the statements made by the Panaconti court in this
regard dealt with a situation in which no res existed. See Panaconti,
865 F.2d at 707. The vessel had not been arrested, and the limitation petitioner
had not posted security. See id. The Panaconti court
found that although the court did not have possession of the vessel or
its bond, the letter of undertaking sufficiently preserved in rem jurisdiction.
See id. at 708. In this case, by contrast, a res definitely
existed and was placed in the hands of the court by Finch.
14. So, in answer to Finch's
query, the reason that a Bangladeshi seaman's action against a Maltese
ship is in federal court is because the shipping company itself sought
the protection and benefits of United States law.
15. The "private interest"
the relative ease of access to sources of
proof; availability of compulsory process for attendance of unwilling,
and the cost of obtaining attendance of willing, witnesses; possibility
of view of [the] premises, if view would be appropriate to the action;
and all other practical problems that make trial of a case easy, expeditious
and inexpensive[;] . . . enforceability of judgment . . . [; and whether]
the plaintiff [has sought to] "vex," "harass," or "oppress" the defendant.
Gulf Oil, 330 U.S. at 508.
The "public interest" factors include administrative
difficulties, reasonableness of imposing jury duty on the people of the
community, holding the trial in the view of those affected, and local interest
in having localized controversies decided at home. See id.
16. See infra
17. In fact, in its briefs,
Finch concedes that its case is distinguishable from the Geophysical
Services case in that Canadian limitation law was found applicable
in the latter case.
18. See supra
19. Federal courts sitting
in admiralty apply the admiralty choice-of-law analysis established in
the Supreme Court cases of Lauritzen v. Larsen, 345 U.S. 571 (1953),
Hellenic Lines, Ltd. v. Rhoditis, 398 U.S. 306 (1970). Under
the Lauritzen-Rhoditis framework (as it is commonly called), courts
examine the following nonexhaustive list of factors to determine which
substantive law controls: (1) the place of the wrongful act, (2) the law
of the flag, (3) the allegiance or domicile of the injured, (4) the allegiance
of the defendant shipowner, (5) the place of contract, (6) the inaccessibility
of the foreign forum, (7) the law of the forum, and (8) the base of operations
of the shipowner. See Solano v. Gulf King 55, Inc., 212 F.3d
902, 905 (5th Cir. 2000). While Karim mentions in passing that the above
factors point toward United States law, he focuses his criticisms on the
district court's utilization of English and Indian precedent in its application
of Bangladeshi law.
20. The district court's
description of the historical origins of Bangladesh concisely and adeptly
explains why Bangladeshi legal traditions draw from the jurisprudence of
India, Pakistan, and the United Kingdom. See Karim I, 94
F. Supp. 2d at 738.
21. Karim argues that
while Bangladeshi legal experts confirmed that a Bangladeshi court would
look to English precedent to determine the "principles" of various causes
of action (such as tort liability), there was no support for the conclusion
that such reference would be made in matters of "quantum." We do not agree.
The record does contain information that Bangladeshi courts would look
to these nations' cases for principles or elements of quantum.
22. We note that Finch's
so-called numerical comparisons as to the value of the award in Bangladesh
are not persuasive. Such homemade statistics are suspect.
23. Section 1(4) of the
MSO reads more completely as follows:
(a) all Bangladesh ships wherever they may
be, except inland ships as defined by the Inland Shipping Ordinance, 1976
(LXXII of 1976); (b) all ships deemed to be registered under this Ordinance
wherever they may be; (c) all ships, not being Bangladesh ships, licensed
under this Ordinance in coasting trade, while engaged in such trade; and
(d) all other ships while in a port or place in, or within the territorial
waters of Bangladesh.
24. We also note that
the district court's determinations implicitly precluded a recovery for
maintenance expenses. As the MSO has been found inapplicable to Karim's
situation, see supra Part III.E, maintenance based on the
MSO was not possible. Basing maintenance on the United States general maritime
law is also not tenable because the district court had determined that
the choice-of-law analysis pointed to Bangladeshi law.