Douglass v. Nippon Yusen Kabushiki

46 F.4th 226
Court of Appeals for the Fifth Circuit·Decided August 16, 2022·No. 20-30382·Published·Cited by 29 cases

Opinion

Case: 20-30382 Document: 00516434558 Page: 1 Date Filed: 08/16/2022

United States Court of Appeals for the Fifth Circuit United States Court of Appeals Fifth Circuit

FILED August 16, 2022 No. 20-30382 Lyle W. Cayce Clerk

Stephen Douglass, Individually and as personal representative of the Estate of Shingo Alexander Douglass; Dora Hernandez, Individually and as personal representative of the Estate of Noe Hernandez; Lan Huynh, Individually and as personal representative of the Estate of Ngoc Truong Huynh; Darrold Martin, Individually and as personal representative of the Estate of Xavier Alec Martin; Erin Rehm, Individually and as personal representative of the Estate of Gary Leo Rehm, Jr.; Lloyd Wayne Rigsby, Jr., Individually and as personal representative of the Estate of Dakota Kyle Rigsby; Carmen Sibayan, Individually and as personal representative of the Estate of Carlos Victor Ganzon Sibayan,

Plaintiffs—Appellants,

versus

Nippon Yusen Kabushiki Kaisha,

Defendant—Appellee,

consolidated with _____________

No. 20-30379 _____________ Case: 20-30382 Document: 00516434558 Page: 2 Date Filed: 08/16/2022

No. 20-30382 c/w No. 20-30379

Jhon Alcide; Richard Allen-Easmon; Dustin Angle; Jesus Arguello; Valerie Arguello, Et al

Defendant—Appellee.

Appeals from the United States District Court for the Eastern District of Louisiana USDC Nos. 2:19-CV-13688 & 2:19-CV-13691

ON PETITION FOR REHEARING EN BANC

Before Richman, Chief Judge, and Jones, Smith, Stewart, Dennis, Elrod, Southwick, Haynes, Graves, Higginson, Costa, Willett, Ho, Duncan, Engelhardt, Oldham, and Wilson, Circuit Judges. Edith H. Jones, Circuit Judge, joined by Richman, Chief Judge, and Smith, Stewart, Dennis, Southwick, Haynes, Costa, Ho, Duncan, Engelhardt, and Wilson, Circuit Judges:* The issue before the en banc court is whether a federal court may exercise personal jurisdiction over a foreign corporation for federal claims, which arise from injuries and deaths of American naval personnel in a collision in foreign waters. To succeed, the plaintiffs must show either that

* Judge Haynes concurs in the judgment only. Senior Judge King was a member of the panel but chose not to participate in en banc rehearing.

2 Case: 20-30382 Document: 00516434558 Page: 3 Date Filed: 08/16/2022

the foreign corporation is “at home” in the United States or that their claims arise from or relate to the foreign corporation’s business activities in the United States. The district court rejected the first alternative based on substantial precedent; the plaintiffs foreswore, as they had to, reliance on the second alternative. We AFFIRM. I. Background Nippon Yusen Kabushiki Kaisha (“NYK”), incorporated and headquartered in Japan, is a major global logistics company that transports cargo by air and sea. For its seaside operations, NYK owns or charters a formidable fleet that includes bulk carriers, container ships (of all sizes), car transporters, tankers, cruise ships, shuttle tankers, drillships, and LNG carriers, among other vessels.1 NYK charters more than half of the ships it uses to transport cargo.2 The vessels call port throughout the world. Between 2017 and 2019, about seven percent of the worldwide port calls made by NYK owned or chartered vessels were in the United States, totaling about 1500 calls annually. A natural consequence of NYK’s handling shipments bound for the United States is that it occasionally litigates in American courts. Since 2010, for example, NYK has filed around thirty lawsuits in federal courts, most involving claims seeking freight charges owed under bills of lading.3 And

1 NYK Group Fleet, NYK LINE FACT BOOK I 2019, at 8 (Apr. 26, 2019), https://www.nyk.com/english/ir/library/fact/first/2019/__icsFiles/afieldfile/2019/10/ 28/190426FB1E_1.pdf (last visited Oct. 23, 2021). 2 Id. 3 See, e.g., Complaint at 3-5, Nippon Yusen Kabushiki Kaisha v. GSF Nut Co., LLC, No. 2:2017-cv-5614 (C.D. Cal. July 28, 2017), ECF No. 1; Complaint at 5-8, Nippon Yusen Kabushiki Kaisha v. Multi-Trans Shipping Agency, Inc., No. 2:2016-cv-9523 (C.D. Cal. Dec. 23, 2016), ECF No. 1; Complaint at 3-5, Nippon Yusen Kabushiki Kaisha v. Wesmex Inc., No. 8:2014-cv-1910 (C.D. Cal. Dec. 3, 2014), ECF No. 1.

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every so often, NYK and its ships are sued in American courts, typically for cargo damaged en route to the United States or for injuries that occurred during cargo operations in the United States.4 Among NYK’s approximately 1700 employees, about 25 are seconded to NYK subsidiaries in the United States. Overall, NYK’s business in the United States and North America makes up less than ten percent of its annual revenue. On June 17, 2017, the ACX Crystal, a 730-foot container ship chartered by NYK,5 collided with the destroyer USS Fitzgerald in Japanese

4 See, e.g., Complaint at 1-5, Epperson v. NYK Line, No. 4:2019-cv-5948 (N.D. Cal. Sept. 24, 2019), ECF No. 1 (negligence claim by American harbor pilot injured in United States waters by allegedly faulty Jacob’s ladder); Complaint at 3-5, Neal v. NYK Line, No. 4:2013-cv-507 (N.D. Cal. Feb. 5, 2013), ECF No. 1 (negligence claim by longshoreman involved in unloading NYK vessel in the United States); Complaint at 2-3, Starr Indem. & Liab. Co. v. Yamato Transp. U.S.A., Inc., No. 2:2016-cv-4616 (C.D. Cal. June 24, 2016), ECF No. 1 (damaged cargo); Complaint at 2-4, Great Am. Ins. Co. of N.Y. v. Hanjin Shipping, No. 2:2015-cv-8798 (C.D. Cal. Nov. 11, 2015), ECF No. 1 (same); Complaint at 2-4, Beachside Produce, LLC v. Nippon Yusen Kabushiki Kaisha, No. 2:2015-cv-4951 (C.D. Cal. June 30, 2015), ECF No. 1 (same). 5 NYK had a time charter for the ACX Crystal. A time charterer obtains use of a ship in only a limited sense: The vessel’s owner “provides the vessel’s master and crew and (depending on the circumstances) pays the normal operating expenses, while the charterer obtains the commercial benefit of having its cargo carried.” David W. Robertson, Steven F. Friedell, & Michael F. Sturley, Admiralty and Maritime Law in the United States 325 (4th ed. 2020). In other words, time charters “are more like taxis or limousine services or hotels than they are like typical leases.” Id. Because the time charterer typically has little or no control over the vessel’s navigation, it almost never bears liability for a collision stemming from navigational error. See Moore v. Phillips Petroleum Co., 912 F.2d 789, 792 (5th Cir. 1990) (“The vessel owner remains responsible for . . . navigational errors by the pilot and negligence by the crew . . . .”) (citation omitted). Thus, even if the plaintiffs could establish personal jurisdiction over NYK, their claims face other substantial hurdles.

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territorial waters.6 As the ACX Crystal’s bow ripped through the Fitzgerald’s hull at midship, several compartments on the Fitzgerald flooded, killing seven American sailors and injuring dozens of others. At the time of the collision, the ACX Crystal, then a Philippine-flagged vessel, was on an intra-Asia trade route. It has never called port in the United States. Personal representatives of the seven sailors killed sued NYK in federal court, asserting wrongful death and survival claims under the Death on the High Seas Act, 46 U.S.C. § 30301 et seq. The injured sailors and their family members sued NYK separately, asserting negligence and loss of consortium claims.7 In both cases, the plaintiffs alleged that NYK, a foreign corporation, is amenable to federal court jurisdiction under Fed. R. Civ. P. 4

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Douglass v. Nippon Yusen Kabushiki, 46 F.4th 226 (5th Cir. 2022).

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