Holland America Inc. v. Wartsila

CourtCourt of Appeals for the Ninth Circuit
DecidedMay 7, 2007
Docket05-35572
StatusPublished

This text of Holland America Inc. v. Wartsila (Holland America Inc. v. Wartsila) is published on Counsel Stack Legal Research, covering Court of Appeals for the Ninth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Holland America Inc. v. Wartsila, (9th Cir. 2007).

Opinion

FOR PUBLICATION UNITED STATES COURT OF APPEALS FOR THE NINTH CIRCUIT

HOLLAND AMERICA LINE INC; and  WINDSTAR SAIL CRUISES LTD, on behalf of themselves as former agents, owners and operators of the former vessel M/S/Y WIND SONG, and together on behalf of their subrogated insurers, Plaintiffs-Appellants, No. 05-35572 v. WÄRTSILÄ NORTH AMERICA, INC.,  D.C. No. CV-04-01368-RSM Defendant, OPINION and WÄRTSILÄ FINLAND OY; WÄRTSILÄ CORPORATION; BUREAU VERITAS S.A.; BUREAU VERITAS (CANADA) INC.; BUREAU VERITAS NORTH AMERICA, INC., Defendants-Appellees.  Appeal from the United States District Court for the Western District of Washington Ricardo S. Martinez, District Judge, Presiding

Argued and Submitted December 7, 2006—Seattle, Washington

Filed May 7, 2007

Before: Betty B. Fletcher, Susan P. Graber, and M. Margaret McKeown, Circuit Judges.

5063 5064 HOLLAND AMERICA v. WÄRTSILÄ N. AMERICA Opinion by Judge McKeown; Partial Concurrence and Partial Dissent by Judge B. Fletcher HOLLAND AMERICA v. WÄRTSILÄ N. AMERICA 5067

COUNSEL

Frank Brucculeri and Bradley M. Rose, Kaye, Rose, and Part- ners, Los Angeles, California, for the plaintiffs-appellants.

Christopher B. Kende and Rodney Q. Fonda, Cozen O’Connor, Seattle, Washington; and Gerald Zingone, Thelen Reid Brown Raysman & Steiner, LLP, Washington, D.C., for the defendants-appellees.

OPINION

McKEOWN, Circuit Judge:

At the heart of this tangled jurisdictional dispute is a simple but unfortunate accident. In 2002, the Wind Song, a Baha- 5068 HOLLAND AMERICA v. WÄRTSILÄ N. AMERICA mian cruise ship, was sailing from Papeete, Tahiti, to Hua- hine, Tahiti. A fire broke out during the voyage, and it eventu- ally spread through the ship, destroying the ship entirely. Holland America Cruise Line (“Holland America”) and Windstar Sail Cruises (“Windstar”) seek to hold defendants Bureau Veritas S.A. (“Bureau Veritas”), Bureau Veritas North America, Inc. (“BVNA”), Bureau Veritas (Canada) Inc. (“BV Canada”), Wärtsilä Corporation (“Wärtsilä”), and Wärtsilä Finland Oy (“Wärtsilä Finland”), among others, liable for the loss of the Wind Song. Before the suit can go forward, we must determine whether the United States District Court for the Western District of Washington may exercise jurisdiction over these parties. This interlocutory appeal concerns only that issue. We hold that the Western District of Washington was not the proper forum; we affirm the district court’s dis- missal of the Bureau Veritas entities for lack of venue and Wärtsilä and Wärtsilä Finland for lack of personal jurisdic- tion.

BACKGROUND

The appeal involves multiple parties, both foreign and domestic. The underlying dispute arising from the accident is not before us. Nonetheless, in order to analyze the jurisdic- tional claims, we first identify the parties, put them in context, and summarize the proceedings in the district court.

I. THE PARTIES

Holland America is a Washington corporation that operates passenger sail cruises. It also acts as an agent for some of its subsidiaries, including Windstar, in contracting for services and repairs. Windstar, a Bahamian corporation headquartered in Seattle, Washington, also operates passenger sail cruises and owned the Wind Song, the sunken ship at issue in this appeal.1 1 Throughout this opinion, we refer to appellants collectively as “Hol- land America.” HOLLAND AMERICA v. WÄRTSILÄ N. AMERICA 5069 Bureau Veritas is a French classification society which sets standards for the quality and integrity of ships and performs ship surveys to determine compliance with the classification society’s rules and regulations, national laws, and interna- tional conventions. BVNA, a separate Delaware corporation, provides classification surveys for vessel owners in the United States, and BV Canada is a Canadian corporation that per- forms similar services. Bureau Veritas surveyed the Wind Song before its launch, and Holland America claims that some combination of the Bureau Veritas entities failed to con- duct adequate surveys, which in turn resulted in the loss of the ship.

The Wärtsilä entities consist of three separate companies: Wärtsilä, Wärtsilä Finland, and Wärtsilä North America (“Wärtsilä NA”). Wärtsilä is a Finnish holding company that indirectly owns both Wärtsilä Finland and Wärtsilä NA—it does not manufacture or design products. Wärtsilä Finland designs and manufactures marine engines, but did not supply the marine engine for the Wind Song. Wärtsilä NA, a Mary- land corporation, sells, repairs, and services marine engines. Holland America alleges that some combination of these cor- porations either designed, manufactured, or sold a faulty engine part that may have contributed to the accident. Some but not all of the parts sold and used by Wärtsilä NA are man- ufactured by other Wärtsilä entities, including Wärtsilä Fin- land.

II. PROCEDURAL BACKGROUND

In its first complaint, Holland America named multiple Wärtsilä entities and Bureau Veritas as defendants. After jurisdictional discovery, Wärtsilä Australia and Wärtsilä New Zealand were dismissed voluntarily from the case and Wärt- silä Finland was dismissed for lack of personal jurisdiction. The district court also granted Bureau Veritas’s motion to dis- miss on the ground that the French forum selection clause in 5070 HOLLAND AMERICA v. WÄRTSILÄ N. AMERICA the contract between Bureau Veritas and Holland America governs the venue of any proceedings.

Holland America then twice amended its complaint to include defendants Wärtsilä, Wärtsilä NA, BVNA and BV Canada. Wärtsilä, BVNA and BV Canada subsequently moved to dismiss. The district court granted Wärtsilä’s motion to dismiss for lack of personal jurisdiction. It also granted BVNA and BV Canada’s joint motion to dismiss, holding that the French forum selection clause applied to BVNA and BV Canada, just as it applied to Bureau Veritas.

These orders left Wärtsilä NA as a party in the case. The district court entered a certification under Federal Rule of Civil Procedure 54(b) and thus we consider these jurisdic- tional issues in an interlocutory appeal.

ANALYSIS

I. BUREAU VERITAS ENTITIES

We first examine whether the district court properly dis- missed the Bureau Veritas entities. We review for an abuse of discretion a dismissal based on a forum selection clause. Mur- phy v. Schneider Nat’l Inc., 362 F.3d 1133, 1137 (9th Cir. 2004) (as amended). The trial court must draw all reasonable inferences in favor of the nonmoving party. Id. at 1138. How- ever, the pleadings need not be accepted as true, and the court may consider facts outside the pleadings. Id. at 1137.

[1] Whether Holland America may litigate its dispute with the BV entities in Washington state depends on which of sev- eral contracts govern their relationship. Holland America claims that the Bureau Veritas entities agreed to a forum selection clause providing for venue in Washington. The Bureau Veritas entities dispute this proposition, relying on two earlier contracts that provide for dispute resolution in the Court of Nanterre, France. HOLLAND AMERICA v. WÄRTSILÄ N. AMERICA 5071 Bureau Veritas and Windstar signed two contracts at the outset of their relationship. The first contract, in 1988, was made among Bureau Veritas, Windstar, and Barber Ship Man- agement (Windstar’s agent). The contract contained a forum selection clause which provided that “[a]ny dispute shall be submitted to the court of Nanterre (France).” The second con- tract, signed in 1991, by Bureau Veritas, Windstar, and Hol- land America contained the same clause.

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Holland America Inc. v. Wartsila, Counsel Stack Legal Research, https://law.counselstack.com/opinion/holland-america-inc-v-wartsila-ca9-2007.