Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-3_04-cv-01481/USCOURTS-cand-3_04-cv-01481-0/pdf.json

Nature of Suit Code: 380
Nature of Suit: Other Personal Property Damage
Cause of Action: 28:1333 Admiralty

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United States District Court

For the Northern District of California

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United States District Court

For the Northern District of California

IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF CALIFORNIA

HONSHU SHIPPING CO, LTD,

Plaintiff,

v

M/V TRADE ZALE, her engines,

machinery, equipment and

appurtenances, in rem,

Defendant.

 /

No C 04-1481 VRW

ORDER

This case arises out the collision of two foreign flag

ocean-going vessels in international waters off the coast of Korea

on January 31, 2004. Currently before the court is defendant M/V

Trade Zale’s (the “Trade Zale”) motion to dismiss on the ground of

forum non conveniens. Doc #25 (Def Mot). Because the court found

this matter suitable for determination without oral argument, the

hearing scheduled for March 24, 2005, was VACATED. Civ L R 7-1(b). 

Based upon the parties’ memoranda and the applicable federal law,

the court GRANTS the Trade Zale’s motion to dismiss. 

Case 3:04-cv-01481-VRW Document 45 Filed 04/28/05 Page 1 of 13
United States District Court

For the Northern District of California

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I

The following facts are not in dispute. On the evening

of January 30, 2004, an ocean-going vessel, the M/V Diamond Ray

(the “Diamond Ray”), was drifting in international waters off the

coast of Ulsan, South Korea. The Diamond Ray is owned by plaintiff

Honshu Shipping Co, Ltd (“Honshu”) and flies the Maltese flag. 

During the early morning hours of January 31, 2004, the Trade Zale,

which flies the flag of Antigua and Barbuda, was also drifting off

the coast of Ulsan in international waters. Shortly before 3:00

am, the Trade Zale and the Diamond Ray collided. The ships were

approximately 15 miles off the coast of Ulsan. 

The two vessels remained locked together for

approximately 60 hours off the coast of Ulsan before they were

separated by salvage tugs on February 2, 2004. During these two

days, the Ulsan Marine Police arrived on board both vessels to

assist the crew and investigate the casualty.

After the separation, the Diamond Ray was towed to the

port of Ulsan where it underwent repairs. The Trade Zale, however,

was first towed to the port of Busan, Korea to unload her cargo and

then proceeded to Ulsan to undergo repairs. Following the repairs

in Korea, the Trade Zale continued her voyage and called at the

ports of Long Beach and Oakland, California to unload some of her

cargo. While in the port of Oakland on April 15, 2004, Honshu

sought and obtained an order from this court to arrest the Trade

Zale and subsequently arrested the vessel as security. At the same

time, Honshu initiated the current action in this court against the

Trade Zale interests for damages arising out of the January 31,

2004, collision (the “California action”). The Trade Zale was

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United States District Court

For the Northern District of California

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released from arrest after security was posted on her behalf. 

Several months later, the repairs to the Diamond Ray were

completed in Ulsan, Korea, and the Diamond Ray prepared to depart

Ulsan. The Trade Zale interests, however, demanded security in the

form of a Letter of Undertaking (“LOU”) as an alternative to

arresting the Diamond Ray in Ulsan. A London-based company signed

the LOU on behalf of the Diamond Ray and the vessel was allowed to

depart the port of Ulsan. The LOU provides that the matter of

liability and assessment of damages shall be submitted to the

exclusive jurisdiction of the Seoul Central District Court and

shall be determined by Korean law. On August 15, 2004, an action

for damages arising from the January 31, 2004, collision was

commenced by the Trade Zale interests against the Diamond Ray

interests in the Seoul court (the “Korean action”). In September

2004, Korean counsel for the Diamond Ray interests acknowledged

service of process in the Korean action. 

On November 5, 2004, the Trade Zale filed the current

motion to dismiss the California action on the ground of forum non

conveniens in favor of the Korean action. Doc #25. Honshu opposes

the Trade Zale’s motion, arguing that this court should retain

jurisdiction over the California action or alternatively, transfer

the matter to the Southern District of New York pursuant to 28 USC

§ 1404(a). Doc #40.

II

“The forum non conveniens determination is committed to

the sound discretion of the trial court. It may be reversed only

when there has been a clear abuse of discretion.” Contract Lumber

Case 3:04-cv-01481-VRW Document 45 Filed 04/28/05 Page 3 of 13
United States District Court

For the Northern District of California

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Co v P T Moges Shipping Co, Ltd, 918 F2d 1446, 1448-49 (9th Cir

1990) (Goodwin, CJ). In determining whether to dismiss a matter on

the ground of forum non conveniens, the court is guided by the

Ninth Circuit’s observation that “‘[i]t is in the field of

admiralty that our federal courts have applied the doctrine of

forum non conveniens most flexibly and over the longest period of

time.’” Id at 1449 (quoting Alcoa SS Co, Inc v M/V Nordic Regent,

654 F2d 147, 153 (2d Cir 1981) (en banc)).

It is well-settled that “[i]n a motion to dismiss on the

ground of forum non conveniens, the burden of proving an

alternative forum is the defendant’s,” here the Trade Zale, “and

the remedy must be clear before the case will be dismissed.” 

Contract Lumber, 918 F2d at 1449 (citation and internal quotation

marks omitted). Accordingly, the Trade Zale “must prove each of

the following: (1) existence of an adequate alternative forum; (2)

choice of law does not militate in favor of retaining the case; (3)

private interest factors favor dismissal and (4) public interests

favor dismissal.” Id (citing Gulf Oil Corp v Gilbert, 330 US 501,

508-09 (1947) and Piper Aircraft Co v Reyno, 454 US 235, 247-52

(1981)). “In carrying this burden, [defendant] must provide

sufficient information to enable the district court to balance the

parties’ interests.” Id.

Finally, a “plaintiff’s choice of forum is usually

entitled to great deference when plaintiff sues in its own home

forum, since it can be presumed to be convenient to plaintiff. 

However, when a U[nited] S[tates] forum is chosen by a foreign

plaintiff,” as Honshu has chosen in the present case, this choice

“is entitled to a lesser degree of deference.” La Seguridad De

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United States District Court

For the Northern District of California

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Centramerica SA v M/V Global Mariner, 2002 US Dist LEXIS 6108, *4-5

(SD NY 2002); see Piper Aircraft, 454 US at 255 (stating that a

district court’s “distinction between a resident or citizen

plaintiffs and foreign plaintiffs is fully justified”). 

III

Applying these clear legal principles to the facts of the

present case and conducting the appropriate balancing of interests,

the court concludes that Korea would be a substantially more

appropriate forum in which to litigate this matter.

A

Initially the court notes that Honshu urges the court to

jettison the balancing analysis employed by the Ninth Circuit in

Contract Lumber and instead adopt a rigid “injustice standard”

applicable to admiralty proceedings in rem (such as this case). 

Doc #40 at 10 (arguing that district courts, regardless of any

balancing test, must exercise their jurisdiction unless an in rem

defendant “can demonstrate that exercise of [such] jurisdiction * *

* would work an injustice.”). To support this argument, Honshu

cites two Fifth Circuit cases that could arguably be read as

creating this strict analytical standard for in rem proceedings. 

See Motor Distributors Ltd v Olaf Pedersen’s Rederi A/S, 239 F2d

463 (5th Cir 1956); Poseidon Schiffahrt GMBH v M/S Netuno, 474 F2d

203 (5th Cir 1973). 

For two reasons, however, the court declines to accept

Honshu’s invitation to adopt this strict standard. First, the

Fifth Circuit has explicitly overruled Poseidon Schiffarht and

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Motor Distributors inasmuch as they stand for a strict “injustice”

standard exception for in rem actions. See Perusahaan Umum Listrik

Negara Pusat v M/V Tel Aviv, 711 F2d 1231, 1236 (5th Cir 1983)

(“Although we concede that Motor Distributors has spawned a line of

in rem cases in this circuit * * * that can be read to create an

exception to the [] balancing analysis, today we address * * *

whether they should be read this way. Our answer to this question

is no.”) (emphasis added). Next, and more importantly, Honshu

provides the court with no case law, and the court can find none,

in which the Ninth Circuit mentions, much less adopts, the

“injustice” standard exception to the well-established balancing

test endorsed by the Supreme Court. 

Accordingly, the court chooses to employ the Contract

Lumber balancing test. 

B

Adequate Alternative Forum

“At the outset of any forum non conveniens inquiry, the

court must determine whether there exists an alternative forum.” 

Piper Aircraft, 454 US at 254n22. The requirement of an adequate

alternative forum “is ordinarily satisfied when the defendant is

amenable to process in the other jurisdiction.” Contract Lumber,

918 F2d at 1450 (citation omitted).

The Trade Zale argues that Korea is clearly an adequate

alternative forum. Doc #25 at 12. Honshu (wisely) does not

seriously contend otherwise. First, the Trade Zale is amenable to

process in Korea; in fact, the Trade Zale has already initiated an

action in the Seoul Central District (an action in which Honshu has

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accepted service). Next, lest there be any doubt, the Trade Zale

interests state that they will “voluntarily submit to the

jurisdiction of Korea.” Id. Moreover, the Trade Zale interests

agree to waive the affirmative defense of statute of limitations in

Korea through January 31, 2006, as well as transfer the security

issued on the Trade Zale in the California action to the Korean

court so that the Diamond Ray interests have security in the Korean

forum. Id at 13. Finally, Honshu does not argue that Korean law

does not offer it a remedy or even less favorable procedural or

substantive law.

The Trade Zale has carried its burden of demonstrating

that an adequate alternative forum exists.

C

 Applicability of United States Law 

“Before dismissing a case for forum non conveniens, a

district court must first make a choice of law determination,” 

Zipfel v Halliburton, 832 F2d 1477, 1482 (9th Cir 1987), as “the

need to apply foreign law favors dismissal.” Piper Aircraft, 454

US at 260n29 (citations omitted). This factor alone, however, is

not enough to warrant dismissal on the ground of forum non

conveniens. Id. 

It is undisputed that United States law will not govern

the California action. Doc #40 at 10, Doc #25 at 14 (“If a

maritime collision takes place on the high seas, the law common to

the flags of both vessels should be applied by the [c]ourt”)

(citing The Belgenland, 114 US 355, 370 (1885)). Despite this

clear principle, and despite the Court’s holding in Piper Aircraft,

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Honshu asserts that the Trade Zale’s “contention that application

of international law favors dismissal is incorrect and deserves

short shrift.” Doc #40 at 11. Honshu bases its argument on the

idea that “[a]pplying foreign law is substantially easy for U[nited

[S]tates courts in 2005” because, pursuant to FRCP 44.1, “district

courts are no longer obliged to rely on the testimony of exert

[sic] witnesses about foreign law [and thus] foreign law can be

argued and briefed just as domestic law can.” According to Honshu,

because no foreign law experts will have to be relied upon or

inconvenienced, the application of foreign law does not favor

dismissal. The court disagrees for two reasons.

First, Honshu’s argument misses the principal point of a

choice-of-law analysis in adjudicating forum non conveniens

motions. The point of this inquiry is not to observe whether the

district judge can apply the choice-of-law principles learned in

law school or to examine and compare the substantive provisions of

the applicable foreign law with forum law. Rather, the point is to

“consider[] whether any particular choice of law determination

mandates a certain forum, [and] thus ending the forum non

conveniens dispute.” Lockman Foundation v Evangelical Alliance

Mission, 930 F2d 764, 771 (9th Cir 1991) (emphasis added); see

Contract Lumber, 918 F2d at 1449 (stating the choice-of-law inquiry

must be undertaken to determine whether the applicable law

“militates in favor of retaining the case”) (emphasis added). If

the applicable law does not mandate a particular forum (e g, an

American forum) then the choice-of-law inquiry is complete and the

court may move on to other (more dispositive) balancing factors.

Second, Honshu’s assertion that FRCP 44.1 eradicates the

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need for a district court to rely on foreign law experts in

applying foreign law is hardly as “clear” a proposition as Honshu

paints it to be. “Although, pursuant to Rule 44.1, courts may

ascertain foreign law through numerous means, expert testimony

accompanied by extracts from foreign legal materials has been and

will likely continue to be the basic mode of proving foreign law.” 

Universal Sales Co, Ltd v Silver Castle, Ltd, 182 F3d 1036, 1039

(9th Cir 1999) (citation omitted).

Accordingly, the court declines Honshu’s invitation to

wrestle, unaided by foreign law experts, with the admiralty law of

Malta and Antigua and Barbuda (the flag states of the Diamond Ray

and the Trade Zale). The second factor weighs in favor of

dismissal.

D

Private Interest Factors

The private interest factors to be weighed include: (1)

ease of access to sources of proof; (2) compulsory process to

obtain attendance of hostile witnesses; (3) cost of transporting

friendly witnesses and (4) other problems that interfere with an

expeditious trial. Contract Lumber, 918 F2d at 1451.

The first private factor is the location of evidentiary

sources. Honshu concedes that there is not a single piece of

evidence located in the entire United States, much less in this

particular district. Indeed, but for the adventitious event that

the Trade Zale called at the port of Oakland after departing from

Korea and was thus arrested here, there would be absolutely no

connection between this district and the events at issue in this

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case. The same is not true of Korea and the Korean court. The

collision was investigated in Korea by Ulsan Marine Police who

obtained statements from witnesses and crewmembers as well as

documents from both vessels. The Korean Port State Control

inspected both vessels in Korea after the collision. Both vessels

sought refuge and were repaired in Korea. The salvage companies

involved are Korean. Ulsan Radar Control has radar data of both

vessels leading up to the collision as well as other vessels in the

vicinity. Finally, Honshu states that there were various Korean

“fishing vessels” adrift in the waters surrounding the Trade Zale

and the Diamond Ray; these potential witnesses to accident most

probably reside in Korea.

It is true that none of the crewmembers of either ship is

located in Korea; the majority reside in the Philippines and the

remainder reside in Germany, Ukraine and Bulgaria. But while this

fact does not necessarily favor dismissal to Korea, it in no way

demonstrates that the United States is a more convenient forum,

especially in light of the fact that all of these witnesses will

necessarily have to appear in the Korean action already pending in

Seoul. And, for what it is worth, the court notes that the

Philippines is considerably closer to Korea (1,616 miles from

Manila airport to Seoul airport) than San Francisco (6,987 miles

from Manila airport to San Francisco International). 

www.gc.kls2.com (“Great Circle Mapper”). Clearly, Korea and the

Korean court can provide greater access to evidentiary sources.

Turning to the second and third factors, it is important

to note that no potential witnesses reside in the United States. 

Korea can provide greater accessibility to witnesses, be they

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friendly or hostile. Honshu does not argue that Korea lacks a

compulsory process by which to obtain the attendance of unwilling

witnesses. Moreover, these witnesses will no doubt be involved in

the Korean suit already pending in the Seoul Central District

Court; it makes more sense to consolidate the witnesses’

presentations in that court. What is more, there is no doubt that

the Korean action is going to go forward: Honshu has obtained

Korean counsel and accepted service of process in the action. 

In light of the fact that (1) no potential witnesses

reside in the United States, (2) no evidence is located in the

United States (3) a substantial number of witnesses reside in

Korea, (4) the majority of the vessels’ crewmembers reside in the

Philippines, closer to Korea than the United States, (5) a

substantial amount of documentary evidence is located in Korea and

(6) an action regarding this same collision is already pending in

Korea, the court concludes that the relevant private factors

strongly favor dismissing the California action in favor of the

Korean forum. 

E

Public Interest Factors

“Public interest factors encompass court congestion, the

local interest in resolving the controversy and the preference for

having a forum apply a law with which it is familiar.” Contract

Lumber, 918 F2d at 1452. The first factor is a wash. The only

argument Honshu puts forward regarding the second factor is that

this district has a local interest in resolving this controversy

because “the Trade Zale posted security” in this district. This

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argument is without merit as (1) the fact that security was posted

in this district is completely a fortuitous event and (2) the Trade

Zale has agreed to transfer the posted security to Korea. 

Accordingly, there is no local interest in resolving this

controversy. United States law will not govern this controversy

and should the case remain here, this court will be called upon to

apply law with which it is unfamiliar.

The public interest factors weigh in favor of dismissing

this case in favor of the Korean forum.

IV

Honshu alternatively “requests” the court “simply

transfer [the case] to the Southern District of New York” pursuant

to 28 USC § 1404(a). Doc #40 at 16. Honshu’s request is denied

for several reasons. 

First, this “request” is procedurally improper. If

Honshu believes that this case should be transferred to the

Southern District of New York, it should have filed a properly

noticed § 1404(a) motion for transfer pursuant to Civ L R 7. It

did not; it simply added a paragraph at the end of its forum non

conveniens opposition requesting the court make the legal

conclusion that a venue transfer is warranted.

More importantly, the general average claims going

forward in the Southern District of New York against the Trade Zale

appear to be brought by United States companies (not Honshu) to

determine whether the cost of repairing the Trade Zale should be

borne, in part, by the companies that had cargo on the vessel. 

Accordingly, these proceedings will not require witnesses and

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evidence relevant to causation, fault and damages associated with

the collision that occurred in Korea. Transferring this case to

New York will not make litigation between Honshu and the Trade Zale

more convenient; indeed, the opposite is true, as transferring the

case to New York would add an additional 1,523 miles distance from

the place at which the controversy arose and where the bulk of the

witnesses are likely found and in no way bring in a decision-maker

likely to be familiar with the applicable law.

V

In sum, the court concludes that the Trade Zale has

carried its burden of demonstrating (1) the availability of an

adequate forum, (2) choice-of-law is not a dispositive

consideration in this dispute and (3) that the private and public

interests weigh heavily on the side of trial in the Korean forum. 

Accordingly, the court GRANTS the Trade Zale’s motion to dismiss on

the ground of forum non conveniens (Doc # 25). This dismissal is,

however, expressly conditioned on the Trade Zale (1) voluntarily

submitting to the jurisdiction of the Korean court over this

matter, (2) waiving any statute of limitations defense it may have

against Honshu in the Korean forum and (3) transferring the

security posted in this district to the Korean court in Seoul. 

 

IT IS SO ORDERED.

 /s/ 

VAUGHN R WALKER

United States District Chief Judge

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