Rajesh Ramchandra Chauhan Versus Southern Pacific Holding Corp. and Kumiai Senpaku Co Ltd

• Court: Louisiana Court of Appeal
• Decided: November 2, 2022
• Docket: 22-C-432
• Status: Unknown

Opinion

RAJESH RAMCHANDRA CHAUHAN NO. 22-C-432

VERSUS FIFTH CIRCUIT

SOUTHERN PACIFIC HOLDING CORP. COURT OF APPEAL AND KUMIAI SENPAKU CO LTD STATE OF LOUISIANA

ON APPLICATION FOR SUPERVISORY REVIEW FROM THE TWENTY-NINTH JUDICIAL DISTRICT COURT PARISH OF ST. CHARLES, STATE OF LOUISIANA NO. 89,972, DIVISION "E" HONORABLE TIMOTHY S. MARCEL, JUDGE PRESIDING

November 02, 2022

JUDE G. GRAVOIS JUDGE

Panel composed of Judges Fredericka Homberg Wicker, Jude G. Gravois, and Hans J. Liljeberg

WRIT DENIED JGG FHW HJL COUNSEL FOR PLAINTIFF/RESPONDENT, RAJESH RAMCHANDRA CHAUHAN Richard J. Dodson Kenneth H. Hooks, III Henry P. Mounger Michael A. Colomb

COUNSEL FOR DEFENDANT/RELATOR, SOUTHERN PACIFIC HOLDING CORPORATION Robert H. Murphy Peter B. Sloss Samuel L. Sands Tarryn E. Walsh GRAVOIS, J.

Relator/defendant, Southern Pacific Holding Corporation, seeks this Court’s

supervisory review of the trial court’s August 5, 2022 judgment which denied its

“Declinatory Exceptions of Lack of Personal Jurisdiction, Improper Venue,

Insufficiency of Citation, and Improper Service of Process.” The issue before this

Court is whether the Louisiana state court in question has personal jurisdiction

over Southern Pacific. For the reasons that follow, we deny the writ application.

FACTS AND PROCEDURAL HISTORY

Respondent/plaintiff, Rajesh Ramchandra Chauhan, filed a petition for

damages against Southern Pacific and Kumiai Senpaku Co. Ltd., arising out of

injuries he allegedly sustained as a seaman while working aboard the M/V WHITE

HORSE.1 The M/V WHITE HORSE is owned by Southern Pacific, a foreign

corporation organized under the laws of Panama with its principal place of

business in Tokyo, Japan. Plaintiff is a citizen and resident of India. On

November 17, 2021, while plaintiff was on the M/V WHITE HORSE in the

Atlantic Ocean on a voyage from Tarragona, Spain to Baltimore, Maryland, he

allegedly sustained an injury to his right thumb. In January 2022, while the M/V

WHITE HORSE was called at port at St. Rose, Louisiana, in St. Charles Parish, the

St. Charles Parish Sheriff’s Office attached the M/V WHITE HORSE pursuant to

La. C.C.P. arts. 9 and 3541(5).

Southern Pacific filed “Declinatory Exceptions of Lack of Personal

Jurisdiction, Improper Venue, Insufficiency of Citation, and Improper Service of

Process.” Regarding the exception of lack of personal jurisdiction, Southern

Pacific argued that pursuant to the United States Supreme Court’s decision in

Shaffer v. Heitner, 433 U.S. 186, 97 S.Ct. 2569, 53 L.Ed.2d 683 (1977), for the

1 A copy of the petition for damages was not included with the writ application.

22-C-432 1 trial court to exercise quasi in rem jurisdiction through the attachment of property,

Southern Pacific must have sufficient minimum contacts with the forum state to

satisfy International Shoe Co. v. Washington, 326 U.S. 310, 66 S.Ct. 154, 90 L.Ed.

95 (1945), and its progeny. Southern Pacific asserted that it does not have the

requisite minimum contacts with Louisiana to allow Louisiana state courts to

exercise jurisdiction over it.2

Following a hearing, the trial court signed a judgment on August 5, 2022

denying the exceptions. In written reasons for judgment, the trial court found that

in maritime and admiralty actions, the presence of the vessel (the res) is the only

jurisdictional fact necessary to support in personam jurisdiction over a foreign

defendant. Further, the trial court found that even if the “minimum contacts” test

applies in the realm of jurisdiction by attachment, Southern Pacific’s “action of

utilizing Louisiana territorial waters satisfies any substantive due process concerns

for in personam jurisdiction.”

LAW AND ANALYSIS

In reviewing a ruling on an exception of lack of personal jurisdiction over a

nonresident defendant by a Louisiana court, this Court conducts a de novo review

of the legal issue of personal jurisdiction. See Sanders v. Sanders, 00-2899 (La.

App. 1 Cir. 2/15/02), 812 So.2d 749, 752, writ denied, 02-1145 (La. 6/14/02), 818

So.2d 780.

Louisiana Code of Civil Procedure article 9 contemplates the assertion of

quasi in rem jurisdiction over a nonresident defendant if property is located in this

state. See Giroir v. Giroir, 536 So.2d 830, 833 (La. App. 1st Cir. 1988). La.

C.C.P. art. 9 provides:

A court which is otherwise competent under the laws of this state has jurisdiction to render a money judgment against a nonresident if the 2 Concerning the other exceptions, Southern Pacific argued that the writ of attachment served as the basis for venue, citation, and service of process, and since the writ of attachment was invalid, those too were invalid.

22-C-432 2 action is commenced by an attachment of his property in this state. Unless the nonresident subjects himself personally to the jurisdiction of the court, the judgment may be executed only against the property attached.

Louisiana Code of Civil Procedure article 3541(5) provides that a writ of

attachment may be obtained when the defendant “[i]s a nonresident who has no

duly appointed agent for service of process within the state.”

In this writ application, Southern Pacific, relying on Shaffer, supra, argues

that the exercise of quasi in rem jurisdiction is not applicable in the present case

since Southern Pacific lacks sufficient minimum contacts with Louisiana to justify

personal jurisdiction.

Shaffer involved a shareholder’s derivative action in a Delaware state court.

The plaintiff filed suit against 30 defendants, including a Delaware corporation

with its principal place of business in Arizona, its wholly owned subsidiary,

incorporated in California with its principal place of business in Arizona, and 28

present and former officers or directors of the corporations, none of whom were

Delaware residents. The activities that led to the action occurred in Oregon. Quasi

in rem jurisdiction was established by a Delaware sequestration statute that

allowed for the seizure of corporate shares and stock options of 21 of the

defendants. Id. at 189-91, 97 S.Ct. at 2572-73. The defendants moved to vacate

the sequestration order, arguing that it violated due process since under

International Shoe,3 they lacked sufficient minimum contacts with Delaware to

sustain the jurisdiction of the state’s court. Id. at 193, 97 S.Ct. at 2573-74. The

Supreme Court agreed and found that the presence of property in the forum state

alone does not support the state’s jurisdiction, noting that the relationship between

the defendant, the forum, and the litigation was the “central concern of the inquiry

3 International Shoe held that due process requires that in order to subject a nonresident defendant to a personal judgment, the defendant must have certain minimum contacts with the forum state such that the maintenance of the suit does not offend traditional notions of fair play and substantial justice. 326 U.S. at 320, 66 S.Ct. at 160.

22-C-432 3 into personal jurisdiction.” Id. at 204, 97 S.Ct. at 2580. The Supreme Court

concluded that “all assertions of state-court jurisdiction must be evaluated

according to the standards set forth in International Shoe and its progeny.” Id. at

212, 97 S.Ct. at 2584.

Louisiana courts have followed Shaffer and have held that to exercise quasi

in rem jurisdiction through nonresident attachment under La. C.C.P. art. 9, the

nonresident defendant must have sufficient “minimum contacts” with the state. In

Dosfer Intercontinental Commercial & Inv., Inc. v. Amerwood Int’l, a Div. of

Hansen-Pringle Co., 468 So.2d 634 (La. App. 4th Cir. 1985), the plaintiff, a

Florida corporation, sold wooden tool handles to the defendant, a Texas

corporation. The plaintiff filed suit on an open account for goods sold to the

defendant, and obtained a writ of attachment on a shipment of wooden handles

purchased by the defendant from a third party in Honduras that was in transit in the

Port of New Orleans. Id. at 635. The Fourth Circuit Court of Appeal found that

the exercise of quasi in rem jurisdiction under La. C.C.P. art. 9 must satisfy the

demands of due process. The court applied the standards set forth in International

Shoe to find that the defendant did not have sufficient “contacts, ties, or relations”

with Louisiana to permit Louisiana jurisdiction by attachment of the defendant’s

property. Id. at 636.

Likewise, in Higley v. Higley, 95-0965 (La. App. 4 Cir. 6/29/95), 658 So.2d

42, writ denied, 95-2266 (La. 11/27/95), 663 So.2d 732, the plaintiff claimed that

the defendant owed her $25,000 for repayment of personal loans. Both the

plaintiff and the defendant were residents of Florida. The plaintiff sought a writ of

attachment of money owed to the defendant by a Louisiana corporation with its

principal place of business in New Orleans. Id. at 44. Finding Shaffer applicable,

the Fourth Circuit Court of Appeal found that though the defendant had contacts

with Louisiana, the contacts did not outweigh the evidence of unfairness to the

22-C-432 4 defendant to require him to defend the suit in Louisiana. The court stated that

Louisiana had no interest in a suit for repayment of a loan involving two out-of-

state residents, and the property attached had no relation to the cause of action

asserted by the plaintiff. The court ordered that the writ of attachment be

dissolved. Id. at 46.

Nevertheless, neither Shaffer nor the above-referenced Louisiana cases

involved a maritime or admiralty claim and the attachment of a vessel.4

Following Shaffer, federal courts have considered Shaffer’s application to

Supplement Rule B for Admiralty or Maritime Claims and Asset Forfeiture

Actions. Rule B establishes quasi in rem jurisdiction by attachment of property if

the defendant is not found within the district.5 Federal courts have upheld the

constitutionality of Rule B and have found that the rule of Shaffer did not apply to

maritime quasi in rem jurisdiction. See Winter Storm Shipping, Ltd. v. TPI, 310

F.3d 263 (2d Cir. 2002); Grand Bahama Petroleum Co., Ltd. v. Canadian Transp.

Agencies, Ltd., 450 F. Supp. 447 (W.D. Wash. 1978); Polar Shipping Ltd. v.

Oriental Shipping Corp., 680 F.2d 627 (9th Cir. 1982); and Amoco Overseas Oil

Co. v. Compagnie Nationale Algerienne de Navigation, 605 F.2d 648 (2d Cir.

1979). In Great Prize, S.A. v. Mariner Shipping Party, Ltd., 967 F.2d 157, 159

(5th Cir. 1992), the U.S. Fifth Circuit Court of Appeals stated, regarding quasi in

rem jurisdiction, that “a good-faith allegation in the complaint that the res is

4 In opposition to this writ application, plaintiff references a recent case in which he alleges that Southern Pacific argued “an almost identical exception to personal jurisdiction over another owner whose vessel was attached in the Mississippi River.” According to plaintiff, the Plaquemines Parish trial court found no merit to the argument, and the Fourth Circuit Court of Appeal and the Louisiana Supreme Court both denied writs. See Int’l Transp. Workers Fed’n v. Forever Pescadores S.A. Panama, 20-00516 (La. 7/2/20), 297 So.3d 770. 5 Rule B states, in part: (1) When Available; Complaint, Affidavit, Judicial Authorization, and Process. In an in personam action: (a) If a defendant is not found within the district when a verified complaint praying for attachment and the affidavit required by Rule B(1)(b) are filed, a verified complaint may contain a prayer for process to attach the defendant’s tangible or intangible personal property--up to the amount sued for--in the hands of garnishees named in the process.

22-C-432 5 present within the geographical jurisdiction of the court is the jurisdictional fact

which gives the court in personam jurisdiction over the defendant purported to

own the res.”6

Though not binding, and recognizing that these federal cases dealt with Rule

B, we nevertheless find them persuasive. Also, the Louisiana Supreme Court in

dicta in Lejano v. Bandak, 97-0388 (La. 12/12/97), 705 So.2d 158, 164, discussed

the importance of quasi in rem jurisdiction in maritime actions, stating:

Admiralty, however, still has a legitimate need for limited forms of jurisdiction such as in rem and quasi in rem. The admiralty court’s primary concern is maritime commerce, which is conducted on both a national and international scale. Those involved in maritime activities are often thinly financed, on narrow margins, highly mobile, and potentially difficult and expensive to locate. Moreover, even if personal jurisdiction can be asserted, when the defendant is a foreign national the judgment may not be enforceable at the place where the defendant’s assets are located. Thus, in cases involving foreign parties, an inability to assert in rem and quasi in rem jurisdiction may mean the effective loss of the claim. … Permitting the quasi in rem action also provides additional assurance to local suppliers and others providing services on credit to transient vessels that they may be able to enforce their claims locally. Such assurances can only operate to the overall benefit of maritime commerce. While it is true that not all of these considerations apply to domestic maritime commerce or our own citizens, the need for such jurisdictional bases when dealing with foreign nationals is not diminished. (Citation omitted.)

Accordingly, upon our de novo review, we find that in this maritime action,

attachment of the M/V WHITEHORSE established quasi in rem jurisdiction over

Southern Pacific. Thus, we find that the trial court properly denied Southern

Pacific’s declinatory exception of lack of personal jurisdiction.

6 The lower federal courts have cited Great Prize to find that the presence of property in the jurisdiction is sufficient to establish jurisdiction over a non-resident defendant. See Bank of W. v. Motor Vessel 2000 FOUNTAIN 27 FEVER, No. 00-6007, 2001 WL 1795540 (D.N.J. Dec. 6, 2001), where the court adopted the Fifth Circuit’s reasoning in Great Prize to find that the court may impose in personam jurisdiction over the defendant by attachment of his vessel in the jurisdiction; MARMAC, LLC v. InterMoor, Inc., 566 F.Supp.3d 559 (E.D. La. 2021), appeal dismissed sub nom, Marmac, L.L.C. v. US Wind, Inc., 21-30662, 2021 WL 8201393 (5th Cir. Dec. 30, 2021), where the court found that if the requirements for Rule B attachment were met, “minimum contacts and the traditional notions do not matter” since any attached property serves as the basis for personal jurisdiction over the defendant. See also, Agrocooperative Ltd. v. Sonangol Shipping Angl. (Luanda) Limitada, No. H-14-1707, 2015 WL 138114 (S.D. Tex. Jan. 8, 2015), where the court found that any attached property served as the basis for personal jurisdiction over the defendant.

22-C-432 6 CONCLUSION

For the foregoing reasons, we find no error in the trial court’s August 5,

2022 judgment which denied Southern Pacific’s Declinatory Exceptions of Lack of

Personal Jurisdiction, Improper Venue, Insufficiency of Citation, and Improper

Service of Process.” This writ application is accordingly denied.

WRIT DENIED

22-C-432 7 SUSAN M. CHEHARDY CURTIS B. PURSELL

CHIEF JUDGE CLERK OF COURT

SUSAN S. BUCHHOLZ FREDERICKA H. WICKER INTERIM CHIEF DEPUTY CLERK JUDE G. GRAVOIS MARC E. JOHNSON ROBERT A. CHAISSON LINDA M. WISEMAN STEPHEN J. WINDHORST FIRST DEPUTY CLERK HANS J. LILJEBERG JOHN J. MOLAISON, JR. FIFTH CIRCUIT MELISSA C. LEDET JUDGES 101 DERBIGNY STREET (70053) DIRECTOR OF CENTRAL STAFF POST OFFICE BOX 489 GRETNA, LOUISIANA 70054 (504) 376-1400

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NOTICE OF JUDGMENT AND CERTIFICATE OF DELIVERY I CERTIFY THAT A COPY OF THE OPINION IN THE BELOW-NUMBERED MATTER HAS BEEN DELIVERED IN ACCORDANCE WITH UNIFORM RULES - COURT OF APPEAL, RULE 2-16.4 AND 2-16.5 THIS DAY NOVEMBER 2, 2022 TO THE TRIAL JUDGE, CLERK OF COURT, COUNSEL OF RECORD AND ALL PARTIES NOT REPRESENTED BY COUNSEL, AS LISTED BELOW:

22-C-432 E-NOTIFIED 29TH JUDICIAL DISTRICT COURT (CLERK) HONORABLE TIMOTHY S. MARCEL (DISTRICT JUDGE) KENNETH H. HOOKS, III (RESPONDENT) PETER B. SLOSS (RELATOR) SAMUEL L. SANDS (RELATOR) TARRYN E. WALSH (RELATOR)

MAILED HENRY P. MOUNGER (RESPONDENT) ROBERT H. MURPHY (RELATOR) MICHAEL A. COLOMB (RESPONDENT) ATTORNEY AT LAW RICHARD J. DODSON (RESPONDENT) 701 POYDRAS STREET ATTORNEYS AT LAW SUITE 400 112 FOUNDERS DRIVE NEW ORLEANS, LA 70139 BATON ROUGE, LA 70802