I. Hyeon Su v. M/V Southern Aster

978 F.3d 462
CourtCourt of Appeals for the Ninth Circuit
DecidedOctober 14, 1992
DocketNos. 90-35485, 90-35486, 90-35706, 90-35618, 90-35879, 91-35375
StatusPublished
Cited by48 cases

This text of 978 F.3d 462 (I. Hyeon Su v. M/V Southern Aster) 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.

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I. Hyeon Su v. M/V Southern Aster, 978 F.3d 462 (9th Cir. 1992).

Opinion

EUGENE A. WRIGHT, Senior Circuit Judge.

These consolidated cases test the bounds of the Seamen’s Wage Act, 46 U.S.C. § 10313 (1988). The Wage Act protects seafarers from the efforts of unscrupulous shipowners to take advantage of their superior economic position to withhold payment of promised wages. Each case requires us to resolve this question: Do the Wage Act’s protections extend to foreign crews discharged from foreign ships in foreign ports? Although Congress likely could have extended the Wage Act this far, we conclude that it did not. The structure, history and, more important, the plain language of the Act all point to this result. Congress must speak clearly to overcome the strong presumption against extraterritorial application of United States law, and this it has not done.

I

Seamen from three Japanese log-carrying ships (the PINE FOREST, FIR GROVE and SOUTHERN ASTER) insist that they were systematically underpaid. The shipowners concede that they paid less than union wages, but say the crew agreed to the lower wages and further agreed to help the shipowners mislead union inspectors intent on uncovering such underpayments.

Underlying the men’s claims is an ongoing dispute between shipowners and the International Transport Workers Federation, an umbrella labor organization of affiliated seafarers’ unions. The unions seek to maintain worldwide wage rates that far exceed what seafarers from undeveloped countries demand.

The shipowners cannot merely ignore the unions, however, for if the owners fail to [466]*466pay the union rate, the unions will sometimes interfere with the loading or unloading of the ships. To avoid this, the shipowners must demonstrate compliance with union rules and, in return, the unions award the ships protection in the form of a “Blue Certificate”. By showing a Blue Certificate, ships can forestall union hostility while in port. Shipowners have devised a scheme to obtain Blue Certificates without paying union wages. They keep two sets of books on each ship. One set records the actual wages paid and the other records union scale wages. Seamen memorize the union scale and the ships’ masters instruct the crew to lie to union inspectors, telling them that the crew are receiving full union wages.

In the ship’s articles, only the union wages are recorded. When the men are paid, they sign two receipts: one records the actual wages and the other shows union wages. This so-called “double-bookkeeping” scheme was used in an effort to deceive the unions on all three ships in this consolidated appeal.

A. The PINE FOREST

The PINE FOREST flew the flag of the Republic of Vanuatu,1 was operated by a Japanese firm, and was owned by a Panamanian corporation which in turn was beneficially owned by Japanese citizens and companies. It carries logs from the United States to Japan; from Japan to the United States it carries only seawater as ballast.

The PINE FOREST entered service in March 1989 with a crew of nineteen Filipino seafarers. Two others joined the ship later. The men signed 12-month contracts in the Philippines, were told what they would be paid, and joined the ship in Japan. Each man signed the PINE FOREST’S shipping articles, which recited that it abid-ed by the union collective bargaining agreement specifying wages that far exceeded what they had been promised in the Philippines. Each was told, however, that he would in fact receive the lower wages originally promised and that he would be expected to help the shipowners deceive the union.

From March 1989 until the end of January 1990, the PINE FOREST sailed back and forth between Japan and the United States, completing eight trips. At each month end, the crew members received their wages and signed receipts for their actual wages and the higher union wages.

The scheme fell apart while the PINE FOREST was in port in Tacoma. On January 30, 1990, eleven of the crew members filed a complaint demanding full union wages. Their attorneys had the vessel arrested. Shortly thereafter, two other crew members signed the complaint. The union later added the remaining eight seafarers to the complaint, but these eight never signed or verified it.

The thirteen who signed the complaint left the PINE FOREST on February 8, after their replacements arrived. In their seamen’s books, which they must take to each new vessel, the master recorded the reason for discharge: “Requested repatriation upon filing wages claim to arrest vessel.” The other eight crew members remained aboard the PINE FOREST, completed their year of service, and left the vessel in Japan.

On February 13, the shipowners tendered $267,586 as the amount due the thirteen crew members who had left the ship. The seafarers divided and accepted this payment but later contended it was insufficient. The court set bond at $19,000,000, which the shipowners posted to release the vessel.

At trial, the plaintiffs succeeded on both statutory and maritime tort claims. The court awarded the seafarers $32,657,536, divided as follows:

Thirteen plaintiffs discharged in United States:

1. Back Wages 23,696

2. Statutory Penalties 4,191,671

3. Loss of Future Income 6,800,470

4. Emotional Distress 1,300,000

5. Punitive Damages 13,000,000

Eight plaintiffs discharged overseas:

[467]*4671. Back Wages 142,236

2. Statutory Penalties 2,799,463
3. Loss of Future Income 0
4. Emotional Distress 400,000
5. Punitive Damages 4,000,000

The court also awarded attorneys’ fees, relying on Vaughan v. Atkinson, 369 U.S. 527, 82 S.Ct. 997, 8 L.Ed.2d 88 (1962).

B. The SOUTHERN ASTER

The SOUTHERN ASTER, like the PINE FOREST, was a Japanese-owned log-carrier that transported United States logs to Japan. The crew was Korean rather than Filipino, and were represented by the Korean affiliate of the International Transport Workers Federation.

The crew joined the ship in Japan in March 1988, worked for about a year, then disembarked in Japan. During that year, the SOUTHERN ASTER made eight trips to the United States. It operated the. same double-bookkeeping scheme as the PINE FOREST, paying the crew a lower wage than the union rate contained in the ship’s articles.

On February 21, 1990, plaintiffs’ attorneys had the SOUTHERN ASTER arrested in Coos Bay, Oregon, after filing a complaint for back wages on behalf of the absent crew. The district court set bond, which the shipowners posted to release the vessel.

The district court dismissed the case, granting the shipowners’ 12(b)(6) motion on the statutory claims and dismissing the remaining claims on the ground of forum non conveniens. The court was not persuaded that the statute applied to foreign seafarers discharged in foreign ports from foreign-owned and flagged vessels. The shipowners agreed to submit to the jurisdiction of a Korean court as a condition of dismissal.

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