UNITED STATES COURT OF APPEALS

For the Fifth Circuit

No. 97-30844

MARINECHANCE SHIPPING, LTD.,

Plaintiff-Appellee,

VERSUS

FERNANDO SEBASTIAN; RAUL GALEDO,

Defendants-Appellants.

Appeal from the United States District Court

For the Eastern District of Louisiana

June 22, 1998

Before WISDOM, HIGGINBOTHAM, and JONES, Circuit Judges.

WISDOM, Senior Circuit Judge:

Fernando Sebast ian and Raul Galedo (“the seamen”) filed this admiralty suit against

Marinechance Shipping Ltd. (Marinechance) seeking damages for injuries incurred while aboard the

M/V ELLISPONTOS. In a carefully reasoned and well-researched decision, district Judge Feldman

granted Marinechance’s motion for a partial summary declaratory judgment, finding that the forum

selection clauses in the seamen’s contracts required their causes of action to be filed in the Republic

of the Philippines. We affirm.

I.

The seamen, both citizens of the Philippines, were injured i n an accident aboard the M/V

ELLISPONTOS while in the navigable water s o f t he Mississippi River near Burnside, Louisiana.

They were transported to a hospital in Baton Rouge for treatment.1 Marinechance invoked the district court’s general admiralty jurisdiction, 28 U.S.C. § 1331 (1).

2 46 U.S.C. § 181, et seq.

2 The M/V ELLISPONTOS is owned by Marinechance, a corporati on with its principal place

of business in Nicosia , Cyprus. Marinechance filed this suit in the federal district court 1 seeking a

declaratory judgment that any litigation arising from the accident must proceed, if at all, in the courts

of the Philippines under th e law o f t he Philippines. Marinechance also sought to limit its liability

under the Limitation of Liabilit y Act. 2 The district court enjoined the seamen from filing suit in the

Louisiana state courts.

The seamen filed a motion to dismiss Marinechance’s declaratory action and to lift the stay

of proceedings. A few mo nt hs later, before the district court ruled upon the seamen’s motion,

Marinechance filed a motion for partial summary judgment on the declaratory action. The district

court granted a partial summary judgment in favor of Marinechance, finding that the forum selection

clauses in the seamen’s contract and the relevant laws and treaties required this suit to be maintained

in the Philippine courts. The district court did not rule upon the seamen’s motions.

The seamen appeal. This Court has jurisdiction to hear the seamen’s appeal from the

declaratory judgment under 28 U.S.C. § 1292(a)(3). The seamen’s appeal from the refusal to lift the

st ay of proceedings is a different matter, however. Although this court has jurisdiction to hear

appeals from the continuance or granting of an injunction under 28 U.S.C. § 1292(a)(1), the district

court did not do either; it declined to decide the issue until the parties submitted a new motion and

briefs on the status of the issue after the court’s ruling on the declaratory judgment. Recognizing this

problem, the seamen request that this Court treat their brief as a petition for a writ of mandamus on

this issue.

II.

First, the seamen argue that the dis t rict court was required to lift the automatic stay of

proceedings under the Limitation of Liabilit y Act because they entered into the following stipulations:

(1) they would not seek damages in excess of the limitation amount, (2) they agreed not to challenge3 Texaco v. Williams , 47 F.3d 765, 767-9 (5th Cir. 1995).

4 In re Stone , 986 F.2d 898, 901 (5th Cir. 1993).

5 S ee Landis v. North Am. Co. , 299 U.S. 248, 254 (1936); United States Abatement Corp. v. Mobil

Exploration & Producing U.S., Inc. , 39 F.3d 556, 559 (5th Cir. 1994).

6 United States Abatement Corp. , 39 F.3d 556 at 559.

3 Marinechance’s right to have the federal court determine the issue of exoneration or limitations of

damages after the state-court trial on the merits, and (3) they agreed to waive any claim of r es

judicata arising from the state court proceedings on t he issue o f limited liability. In T exaco v.

Williams

, this Court found that a stay of proceedings should be lift ed so that the claimants may assert

their actions in state court under the Savings to Suitors Clause of 28 U.S.C. § 1333 if these

stipulations are made. 3 The seamen’s stipulations were identical with those in Texaco

.

Inst ead of ruling upon the seamen’s motion to lift the stay, the district court ent ered a

declaratory judgment in

favo r of Marinechance, finding that this suit must proceed, if at all, in the

Philippines. The district court noted that the parties should file a new motion and briefs on the effect

of the declaratory judgment on their request to lif t the stay. In effect, however, the declaratory

judgment m

ooted the motion to lift the stay. The seamen argue that the district court’s declaratory

judgment should be reversed and the district court should be compelled to lift the stay of proceedings

so that this action can be maintained in the Louisiana courts. They argue that any issue of choice of

laws or choice of forum may be addressed fully in the state court. Marinechance maintains that the

district court merely exercised its discretion to control its docket by deci ding an issue that was

dispositive of the case before reaching any other issues.

This Court will grant a writ of mandamus only when there is a “usurpation of judicial power”

or a clear abuse of discretion. 4 In this case, the district court did not clearly abuse its discretion. The

district court possesses the inherent power to control its docket. 5 This power includes the authority

to decide the order in wh ich to hear and decide pending issues. 6 The district court used its7 Rowan Companies v. Griffin , 876 F.2d 26, 29 (5th Cir. 1989).

8 Id (internal citations omitted).

4 discretionary authority to handle this case in the most efficient way; the court ruled upon the

potentially dispositive issue first.

III.

The seamen also argue that the district court erred in granting a declaratory judgment because

Marinechance filed its declaratory action in anticipation of a suit in state court. They maintain that

this is a type of forum shopping condemned by this Court. Marinechance argues that t he district

court properly exercised its discretion to grant declaratory relief.

A district court’s decision to grant or to deny declaratory re lief is reviewed for abuse of

discretion. 7 In Rowan Companies v. Griffin , this Court listed several factors to consider when

deciding whether to grant declaratory relief.

F or example, declaratory relief may be denied because of a pending sta te court proceeding in which

t he mat ters in controversy between the parties may be fully

litigated, because the declaratory complaint was filed in anticipation of another suit

and is being used for the purpose of forum shopping, because of possible inequities

in permitti ng t he plaintiff to gain precedence in time and forum, or because of

inconvenience to the parties or the witnesses. 8

The second situation listed is most applicable to this suit. Without question, Marinechance filed this

declaratory action in anticipation of the seamen’s suit in the state courts. The question is whether

Marinechance was engaged in forum sh opping. The di stri ct court found that i t was not.

Marinechance was not attempting to litigate its claims in federal court instead of state court, nor was

it trying to obtain a bench trial instead of a jury trial. Rather, Marinechance was seeking to enforce

its choice of forum provisions requiring the suit to be pursued in the Philippines. This declaratory

action was the most efficient means of invoking its rights under the contract.

The seamen argue that this result destroys the policies underlying the savings to suitors clause

because it deprives the seamen of their choice of a state court forum. Rule 57 of the Federal Rules

of Civil Procedure expressly states that the availabilit y of an alternative remedy does not prevent the9 705 So.2d 158 (La. 1997).

10 The seamen were not being deprived of a jury trial on this issue either. Whether the choice of laws

provisions in the seamen’s contracts are enforceable is determined by the court as a matter of law. The seamen

could not obtain a jury trial on this issue in either federal or state court.

11 “The remedy made available by the Declaratory Judgment Act and Rule 57 is intended to minimize

the danger of avoidable loss and the unnecessary accrual of damages and afford one threatened with liability

an early adjudication without waiting until an adversary should see fit to begin an action[.]” Wright, Miller,

& Kane, Federal Practice and Procedure : Civil 3d. § 2751 (1998).

12 The Philippine Overseas Employment Administration is a government organization created to:

a. promote and develop overseas e mployment opportunities in cooperation with relevant

government institutions and the private sector; b. establish the environment conducive to the

continued operations of legitimate and responsible private agents; and c. afford protection to Filipino workers and their families, promote their interests and safeguard their welfare. To

effectuate these policy goals, the POEA regulates principals and projects, recruitment,

advertis ement and placement; contract processing and travel documentation; employment

standards; the filing of grievances; and provides worker assistance and welfare services.

Cruz v. Chesapeake Shipping, Inc.

, 738 F.Supp. 809, 815 (D.Del 1990), aff'd 932 F .2d 218, 221 (3d Cir.

1991) (citations omitted). The POEA has been replaced by the Philippines National Labor Relations Council.

5 district court from granting a declaratory judgment. Even if the seamen were able to bring this action

in the state court, the Louisiana Supreme Court’s decision in Lejano v. K.S. BANDAK shows that the

same result would follow because the court would apply federal law to determine the validity of the

choice of forum provisions. 9 The seamen were not denied the traditional benefits of the savings to

suitors clause. 10 The district court did not abuse its discretion, then, by granting declaratory relief.

Instead, the district court’s decision ensured that Marinechance’s rights were protected at the earliest

possible time. This is the primary goal of declaratory action. 11

IV.

Finally, the seamen argue that the district court erred in granting a partial summary judgment

enforcing the forum selection clauses in the seamen’s employment contracts. The seam en were

employed under a contract (the Employment Contract) approved by the Ph ilippine Overseas

Employment Administration (POEA) 12 . That contract provides that:

All claims, complaints or controversies relative to the implem entation and

interpretat io n of this overseas employment contract shall be exclusively resolved

through the established grievance machinery in the Revised Employment Contract for6

Seafarers, the adjudication procedures of Philippine Overseas Empl o yment Administration and the Philippine Courts of Justice, in that order.

The Employment Contract also states that: “[t]he terms and conditions of the revised Employment

Contract for seafarers governing the employment of Filipino seafarers approved by the POEA

. . .

shall be strictly and fait hfully obs erved.” The Revised Employment Contract for Seafarers (the

Revised Contract) includes the following provisions:

Section 28 - Jurisdiction

The Philippine Overseas Employment Administration (POEA) or the National Labor

Relations Commission (NLRC) shall have original and exclusive jurisdiction over any and all disputes or controversies arising out of or by virtue of this Contract . . .

Section 29 - Applicable Law

All rights and obligations of the parties to this Contract, including the annexes thereof,

shall be governed by the laws of the Republic of t he Philippines, International

Conventions, Treaties and covenants where the Philippines is a signatory.

The Revised Contract incorporates the Migrant Workers’ and Overseas Filipinos’ Act of 1995 which

grants the Labor Arbiters of the NLRC in the Philippines the exclusive jurisdiction to hear “the claims

arising out o f an employer-employee relationship or by virtue of any law or contract involving

Philippine workers for overseas employment including claims for actual, moral, exemplary and other

forms of damages.” The Revised Contract also incorporates the treaty between the Republic of the

Philippines and the Republic of Cyprus regarding the employment of Philippine and Cypriot seamen

which states:

Any disputes arising out of the respective contract of employment between a ship

owner of one Contracting Party and a seaman of the other Contracting Party shall be

referred for settlement solely to the exclusive jurisdiction of the competent Courts or Authorities, as the case may be, in the country of the seaman’s nationality where the

contract of employment was signed and approved.

Each of these provisions points to resolution of the seamen’ s dispute with Marinechance in the

Philippines. The two questions that this Court must address are (1) whether these forum selection1 3 C arnival Cruise Lines, Inc. v. Shute

, 499 U.S. 585, 590 (1991); Lejano v. K.S. BANDAK

, 705 So.2d

158, 166 (La. 1997).

1 4 4 07 U.S. 1, 11 (1972). The position accepted by the B REMEN Court mirrors that articulated by the

American Law Institute. “The parties’ agreement as to the place of the action cannot oust a state of judicial

jurisdiction, but such an ag r eement will be given effect unless it is unfair or unreasonable.” R estatement

(Second) of Conflict of Laws § 80.

15 407 U.S.. at 13-4.

1 6 I d

. at 15. Justice Kennedy summarized the strong presumption in favor of the enforceability of forum

selection clauses as foll ows: “ a va lid forum selection clause is given controlling weight in all but the most

exceptional cases.” S tewart Organ ization v. Ricoh Corp

. , 101 L.Ed.2d 22, 34 (1988) (Kennedy, J.,

concurring).

17 499 U.S. 585 (1991).

7 clauses are valid and (2) whether they cover causes of actio n so unding in tort. To answer these

questions, we apply federal maritime law. 13

A.

In M/S BREMEN v. Zapata Off-Shore

, the Supreme Court held that forum selection clauses

in admiralty cases are presumptively valid and enforceable. 14 Forum selection clauses are important

in int ernational cases such as the instant case because there is much uncertainty regarding t he

resolution of disputes. Ocean-going vessels travel through many jurisdictions, and co uld become

subject to the laws of a particular jurisdiction based solely upon the fortui tous event of an accident.

“The elimin at io n o f all such uncertainties by agreeing in advance on a forum acceptable to both

parties is an indispensable element in international trade, commerce, and contracting.” 15 To overcome

the presumption that the forum selection clause is enforceable, the party challenging the clause must

make a “strong showing” that the clause is unreasonable. 16

The Supreme Court refined its analysis of forum selection clauses in Carnival Cruise Lines,

Inc. v. Shute

. 17 This time, the Court faced a slip and fall negligence action brought by a passenger

aboard Carnival Cruise Lines's ship, TROPICALE. The ticket authorizing passage aboard the ship

contained a clause requiring all disputed cases to be filed in the state of Florida. The passenger filed

suit in the state of Washing t o n. Carnival Cruise Lines asserted the forum selection clause as a18 Id . at 590.

19 The passenger entered into a contract with Carnival Cruise Lines by paying for the cruise by check

well before seeing the ticket containing the forum selection clause. Id . at 587-8.

20 Id . at 593.

21 Id . at 595.

22 Id . at 593-4.

23 Id

.

8 defense. The passenger attacked the clause because it was not the product of negotiation and tended

to deprive the passenger of her day in court. 18 The Court rejected these arguments. Even though the

passenger did not 19 and could not bargain for this forum selection clause due to a lack of bargaining

power, the Court held that forum selection clauses in routine contracts of passage are enforceable so

long as they are reasonable. 20 This t ype of clause is "subject to judicial scrutiny for fundamental

fairness". 21 This clause limited Carnival Cruise Lines exposure to suits in multiple forums, eliminated

passenger's confusion about where to file suit against Carni val Cruise Lines, and tended to reduce

ticket prices. 22 Therefore, this clause was reasonable and enforceable. 23

The similarit

ies between the present case and Carnival Cruise Lines are many. The contracts

of employment for seamen aboard international vessels are routine; the seaman individually do not

have much bargaining power. The selection of a forum in advance reduces the vessel owner's

exposure to suits in forums all over the world. Furthermore, it informs the seamen of where their

causes of action can be maintained. Where this case departs from C arnival Cruise Lines is that the

forum selection clause was imposed b y an arm of the Philippine government rather than by either2 4 T his clause was included under the POEA's authority to protect Philippine seamen. Nevertheless, the

vessel owner, who was forced to accept this provision before hiring a Philippine seaman, may rely upon that

provision. Nothing in the Revised Contract make its provisions enforceable at the whim of the seaman.

2 5 The effect of POEA intervention in employment contracts is to shift the balance of power slightly in

favor of the employee in much the same way that a labor union or legislative enactment of minimum work

standards increases the level of protection for employees in the United States.

The seamen argue that this case is controlled by our decision in Randall v. Arabi a n Amer. Oil Co

, 778 F.2d 1146 (5th Cir. 1985). In R andall

, we held that a district court was not deprived of jurisdiction over

a case by a foreign country’s law calling for exclusive jurisdiction in its courts. I d

. at 1150. The present case

is not similar to R andall

. Although the forum selection clause at issue here is the result of governmental

intervention in the Philippines, that clause is part of the contract agreed to by the parties. The forum selection

clause here is contractual, not legislative.

26 In Cuizon v. Kedma, Ltd. , the District Court for the Southern District of New York found that a

similar POEA forum selection clause was unenforceable because it was a con t ract of adhesion. 1997 WL

37938, *5-*6 (S.D.N.Y. 1997) We respectfully disagree with that decision. The C uizon court focused almost

exclusively on the fact that the parties could not negotiate for this provision; it did not conduct an inquiry for

fundamental fairness This ignores the Supreme Court's decision in Carnival Cruise Lines v. Shute

.

27 A lthough the Supreme Court did not discuss a contract / tort distinction in Carnival Cruise Lines v.

Shute

, the Court rejected, by necessary implication, an across-the-board differentiation between contract and

tort causes of action when enforcing forum selection clauses. C arnival Cruise Lines was purely a tort (slip

and fall) case. 499 U.S. at 588. The Court applied the forum selection clause contained in the parties' contract

to this cause of action.

In C oastal Steel Corp. v. Tilghman Wheelabrator, Ltd.

, 709 F.2d 190 (3d Cir. 1983), the Uni ted

States Court of Appeals for the Third Circuit rejected a contract / tort distinction. In doing so, it acknowledged

that the policies justifying application of forum selection clauses in contract cases are equally applicable to tort

causes of action arising out of that contractual relationship. I d. at 203. Any contrary conclusion would allow

a forum selection clause to be defeated by "artful pleading". Id . This points to an additional problem with

a contract / tort distinction, these causes of action tend to blur together. S ee e.g., M/S BREMEN v. Zapata OffShore

, 407 U.S. 1 (1972), in which the same events gave rise to both negligence and breach of contract actions.

9 party. 24 This distinction does not alter the fact that the forum selection clause is fundamentally fair. 2 5

We find, then, that the forum selection clauses in the seamen's contracts are enforceable. 26

B.

The seamen argue that the forum selection clauses in their contrac t do not appl y to the

seamen’s tort causes of action. The district co urt did not expressly consider this contract / tort

distinct i on that the seamen attempt to draw. We find no persuasive support for such a general

distinction. 27 Instead, we must look to the language of the parties' contracts to determine which

causes of action are governed by the forum selection clauses.2 8 T he district court in Cuizon v. Kedma, Ltd

, considered this language in a similar case involving

Philippine seamen and concluded that it did not cover tort causes of action. 1997 WL 37938, *2 (S.D.N.Y.

1997).

29 499 U.S. 585, 587-8 (1991).

30 705 So.2d 158 (La. 1997).

10 Here, we have two forum selection clauses upon w hich t he parties place their primary

reliance. The seamen direct our attention to the Employment Contract’s language establishing the

Philippines as the exclusive forum for disputes regarding the “implementation and interpretation of

this overseas employment contract”. They maintain that this language covers contract claims only.

Marinechance relies primarily upon the Revised Contract which makes the Philippines the exclusive

jurisdiction f

o r “any and all disputes or controversies arising out of or by virtue of this Contract”.

Marinechance argues that this includes tort causes of action.

For present purposes, we will assume that the seamen are correct and that the forum selection

clause of the Employment Contract does not include tort causes of action. 28 We find, however, that

the forum selection clause of the Revised Contract is the provision governing the appropriate forum

for tort actions. The employment contract expressly incorporates the Revised Contract; it states that

the terms of the Revised Contract shall be “strictly and fait hfully observed”. Because there is nothing

in the Employment Contract to displace or modify the forum selection clause of the Revised Contract,

other than the clause that the seamen admit does not apply to tort causes of action, we find that the

language of the Revised Contract is controlling.

Several courts have considered forum selection language similar to that o f t he Revised

Contract and have concluded that the forum selection clauses applied to to rt causes of acti on.

Examples of these include: C arnival Cruise Lines, Inc. v. Shute

, 29 in which the Supreme Court found

that “all disputes and matters whatsoever arising under, in c onnection with or i nci dent to thi s

Contract” incl

uded a negligence (slip and fall) cause of action; and L ejano v. K.S. BANDAK

, 30 in

which the Louisiana Supreme Court found that a forum selection clauses encompassing all “[c]ases

concerning the seafarer’s service on the ship” included tort causes of action. This interpretation has31 1992 WL 162609, *3 (E.D. La. 1992).

32 Id

.

3 3 O ur conclusion is bolstered by the fac t that the Revised Contract provides for benefits and

compensation to injured seamen.

11 not been universal, however. In H odge v. Ocean Quest

Int’l, Ltd , a district court interpreted an

employment contract forum selection clause stating that “[n]o claim, demand, action, proceeding,

arbitration, litigation, hearing, motion, or lawsuit , arising herefrom or with respect hereto shall

commence or be prosecuted in any jurisdiction other than the Cayman Islands” not to apply to the

employee’s tort cause of action against her employer. 31 That court rested its decision squarely upon

the contract / tort distinction. 32 We find that the decisions of the United States Supreme Court and

the Louisiana Supreme Court are more persuasive. There is no t hing in these clauses that justifies

limit ing t heir application to contract claims. “[A]ny and all disputes or controversies arising out of

or by virtue of this Contract” includes tort causes of action arising during the course of employment

between the seamen and Marinechance. The district court did not err in enforcing the forum selection

clause in this suit. 33

V.

For the foregoing reasons, the district court’s judgment is AFFIRMED.