Thorman v. American Seafoods Co.

421 F.3d 1090, 2005 WL 2098899
CourtCourt of Appeals for the Ninth Circuit
DecidedAugust 31, 2005
Docket03-36012
StatusPublished
Cited by9 cases

This text of 421 F.3d 1090 (Thorman v. American Seafoods Co.) 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
Thorman v. American Seafoods Co., 421 F.3d 1090, 2005 WL 2098899 (9th Cir. 2005).

Opinions

McKEOWN, Circuit Judge:

Philip Thorman, on behalf of a class of similarly situated crew members, appeals the district court’s grant of summary judgment in favor of American Seafoods Company and American Seafoods Company LLC (in personam defendants) as well as various vessels owned by these companies (in rem defendants) (the defendants collectively, “American Seafoods”). The district court concluded that Thorman’s claims were time-barred because the contractual six-month limit on disputes had expired. We agree and affirm the district court’s summary judgment order.

Crucial to our decision is that the merits of Thorman’s claims are not before us. Instead, we are faced with the threshold issue of whether Thorman has overcome the six-month time-bar to his claims. To surmount this preliminary hurdle, he must establish either fraudulent concealment, which requires proof of “affirmative conduct upon the part of [American Seafoods] which would, under the circumstances of the case, lead a reasonable person to be[1092]*1092lieve that he did not have a claim for relief,” Volk v. D.A. Davidson & Co., 816 F.2d 1406, 1415 (9th Cir.1987) (quoting Gibson v. United States, 781 F.2d 1334, 1345 (9th Cir.1986)), or that American Sea-foods owed him a fiduciary duty, as passive concealment is insufficient for a court to grant equitable tolling “unless the defendant had a fiduciary duty to disclose information to the plaintiff.” Conmar Corp. v. Mitsui & Co. (U.S.A.), 858 F.2d 499, 505 (9th Cir.1988). We hold that, as a matter of law, Thorman has failed to establish that American Seafoods engaged in affirmative conduct to conceal the underlying claims. Nor does our precedent support the imposition of a fiduciary duty on American Seafoods to disclose its precise methods for estimating the value of the catch.

FACTUAL AND PROCEDURAL BACKGROUND

Thorman worked as an on-board fish processor for American Seafoods for several seasons between 1996 and 2000.1 Under the crew member agreements executed for each trip, American Seafoods agreed to calculate Thorman’s wages based on the quantity and value of the catch, a common compensation method in the fishing industry. See, e.g., TCW Special Credits v. Chloe Z Fishing Co., 129 F.3d 1330, 1331 (9th Cir.1997) (explaining that it is typical to compensate crew members by multiplying their rate, which is based on “rank, job classification, duties and ability,” by the amount of fish caught). After each trip, American Seafoods mailed Thorman a paycheck along with a settlement sheet that listed how the earnings had been calculated based on the contractual formula.

Thorman’s claims hinge on the way in which American Seafoods estimated the value of the catch. Under the contracts, wages were based on American Seafoods’ preseason estimate of the sale prices rather than the post-season prices that the catch actually fetched. American Seafoods multiplied this predetermined estimate— termed in the contracts as the “posted sales price” or “posted price” of fish products — by each crew member’s share to determine individual compensation for the trip. Thorman argues that American Sea-foods did not implement the contracts in good faith because it underestimated the gross prices it expected to receive from selling the fish and reduced those estimates by excessive deductions for sale costs.

American Seafoods used two slightly different, but substantially similar, compensation clauses during the period at issue: The form used prior to the 1999 pollock B season (“Old Contract”) and the form used commencing with the 1999 pollock B season (“New Contract”).

The Old Contract provides, in part, as follows:

[American Seafoods] shall pay Crew Member a production share. The total production share earned by Crew Member shall be calculated by multiplying the production share of [_2] by the posted sales price of fish product(s) processed aboard the vessel.... Crew Member understands that the posted [1093]*1093prices upon which compensation is based, is set at the sole discretion of the Company. Actual final sales prices may be greater or less than stated in the posted price but will not alter or affect Crew Member’s settlement for the trip at any time.

The basic compensation scheme did not change under the New Contract, but American Seafoods revised the compensation clause to read as follows:

4.1 ... Crew Member shall be paid _share(s) for each trip completed....
4.2 The value of one share is calculated by totaling the number of assigned shares of all the Crew Members working at the start of the trip and dividing that sum into the crewshare pool. The total number of assigned shares will be posted prior to the start of each trip.... The posted price for products produced on the vessels will be communicated to all vessels prior to the start of each trip. The prices posted are the company’s good faith estimate of the market price of products produced aboard the vessels with deductions taken for costs of product shipment, packaging supplies, additives and costs of fish purchases if applicable.
4.3 Posted Prices are set at [American Seafoods’] sole discretion. Actual sales prices may be greater or less than the posted prices.

Significantly, each contract included a “Time for Claims” clause that limited claims arising out of the contract or the employment relationship in general to six months after the contract was completed or terminated. Although the final contract at issue was completed in October 1999, Thorman did not commence this lawsuit until October 2001 — well past the six-month limit set forth both in the contracts and by statute for in rem wage claims brought by crew members aboard fishing vessels. See 46 U.S.C. § 10602(a).

Nonetheless, Thorman argues that the suit is timely because it was brought within six months after American Seafoods produced a Confidential Offering Memorandum in another lawsuit, which he contends finally brought his claims to light. The Offering Memorandum provides:

[The compensation structure] pays crew employees based on the total production value of the vessel. In an effort to provide crew members with more certainty of income, the value of the vessel is computed using expected market prices that the Company [i.e., American Seafoods Group LLC] posts on the vessels prior to their departures. These prices are typically slightly lower than expectations since the Company ultimately assumes the burden of changing market conditions with respect to the effect of prices on crew compensation.

In his complaint, Thorman claims, “Until April 20, 2001, [the date on which the Offering Memorandum was produced,] defendants fraudulently concealed from plaintiffs their policy of low-balling crew prices, thereby preventing plaintiffs from discovering the causes of action asserted here.”

The district court granted American Seafoods’ motion for summary judgment and dismissed Thorman’s claim as time-barred. The court concluded that Thor-man failed to establish fraudulent concealment as a matter of law as to all claims.

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Cite This Page — Counsel Stack

Bluebook (online)
421 F.3d 1090, 2005 WL 2098899, Counsel Stack Legal Research, https://law.counselstack.com/opinion/thorman-v-american-seafoods-co-ca9-2005.