Court Opinion

ID: 9485900
Source: CourtListenerOpinion
Date Created: 2023-08-05 11:33:22.849536+00
Date Added: 2024-06-11T17:51:26.019672
License: Public Domain

DeMOSS, Circuit Judge,
dissenting:
I am unable to concur with the decision of my colleagues in one crucial respect: I think proper evaluation of the Lauritzen-Rhoditis factors requires that the choice of law determination in this case be made in favor of the law of the United Arab Emirates (UAE) rather.than that of the United States. My differences with the panel on the Lauritzenr-Rhoditis choice of law factors involve the first factor, i.e. the place of the wrongful act; the fourth factor, i.e. the allegiance of the defendant ship owner; and the fifth factor, i.e. the place of the contract.
Looking first at the place of the wrongful act, the panel opinion devotes one sentence to analysis of this subject. It recognizes that “the accident occurred in the territorial waters of the United Arab Emirates” and that since this is a “nontraditiónal maritime case,” that factor is entitled to considerable weight. There is no doubt that Coats was injured while on board the Penrod 69, a jackup drilling rig owned and operated by Penrod Drilling Corporation (Penrod). Where the Pen-rod 69 was at the time of the accident is ambiguously stated in the panel opinion. In the opening paragraph, the rig is described as being “off the coast of the United Arab Emirates,” but later on in the factual description, it is described as being “located in the Port of Mina Saqr in the territorial waters of the United Arab Emirates.” In my judgment there is a crucial difference between being “off the coast” and being “in port,” for the latter necessarily implies that the vessel was within the boundary recognized for international law purposes as the boundary of the United Arab Emirates and within what would be referred to under United States nomenclature as the “inland waters” of Ra’s A1 Khaymah, the particular emirate in which that port is located. We áre talking about the Penrod 69 being within inland waters of Ra’s A1 Khaymah just like we would talk about it being within the inland waters of the State of Texas if it were in the Port of Galveston or within the inland waters of the State of Mississippi, if it were it the Port of Biloxi. Secondly, the Penrod 69 had been in these inland waters for some eight or nine months prior to the date of Coats’ injury. The records are clear that on August 12,1987, the Penrod 69 was surveyed for its annual condition certificate; and at that time, the survey report indicates that the “vessel lay jacked-up” in this port. The Penrod 69 was out-of-service, deactivated, not operated, and not occupied by any personnel other than a watchman, up until January 1988, when as a result of a new contract for its use in a Persian Gulf drilling activity, Penrod commenced the task of preparing Penrod 69 to go back into service. During this interval that it was deactivated, the Pen-rod 69 functioned solely as an artificial wharf or dock for the purpose of storing the equipment and facilities thereon, with its legs standing on the bottom of the port and its hull up out of the water. In accomplishing the refurbishing work, Penrod used its own personnel (assumptively the crew of the Pen-rod 69) and other categories of “contract labor, catering, and service personnel.” MIS was hired by Penrod to assist in the refurbishing work and MIS designated Coats to operate the MIS pump which was brought on board to provide pressure to test certain *893pressurized systems of the rig. The daily reports as to the personnel working on board the rig, which are in the record, reflect that the totals of contract labor, catering, and service personnel always exceeded the number of Penrod personnel. The record does not clearly indicate whether on the date of injury, April 12, 1988, the Penrod 69 was still in a “jacked-up” position,.or whether its hull had been lowered into the water. Obviously, if it was still at a jacked-up position, its categorization as a “vessel” is in serious doubt. Even if it had been lowered into the water, however, the nature and extent of the work going on, and the number of outside personnel deployed in such work, clearly demonstrate that the repair, and refurbishing activities were beyond the capacity of the “crew” of the Penrod 69 to accomplish; and that such work could be accomplished only with the ready availability and access of shore-based personnel and facilities. In my view, under these facts, the “place of the wrongful act” element of the Lauritzen-Rhoditis factors should be given more than just “considerable weight” as the panel does. It should be the controlling factor in the choice of law decision. I have looked for and have been unable to find any Supreme Court decision or Fifth Circuit decision which has applied United States law to resolve the claim of a shore-side worker injured while assisting in the refurbishing of a jacked-up drilling rig while it was located within the inland waters of another nation; and in my opinion the panel decision constitutes an unacceptable extension of United States law into areas where simple comity among nations requires that the law of the place of the casualty apply.
My second area of disagreement with the panel regarding the Lauritzen-Rhoditis factors concerns the factor of allegiance of the defendant .shipowner. I do not quarrel with the panel’s determination that the allegiance of Penrod as owner of the Penrod 69, is to the United States. But, in my view, the factor of “allegiance of the defendant shipowner” has materiality only in the circumstance where the flag of the vessel and the allegiance of the defendant shipowner are different (i.e. the flag is a flag of convenience), and the law of the nation of allegiance of the defendant shipowner can appropriately be applied to the determination of rights between that shipowner and his seaman employee when that vessel is engaged in international commerce. In this case, however, the allegiance of the defendant shipowner is an inconsequential factor: ■ first, because Penrod 69 is documented under the United States flag and Penrod’s allegiance is to the United States and there is no flag of convenience involved; and- secondly, and more importantly, because both the district court and the panel opinion recognize that there was no employment relationship as seaman, or otherwise, between Penrod and Coats. The majority’s use of the allegiance, of the defendant shipowner to tip the scales in favor of application of United States law would, in my judgment, be .improvident even if the only defendant in this case were Pen-rod; because that factor should be applied only where there is an employment relationship between the injured plaintiff and the defendant shipowner. But, Penrod is not the only defendant in this case; and the other defendant, MIS, is not a shipowner; it is an entity whose allegiance is owed to the laws of the United Arab Emirates; and it is in fact the employer of Coats. I am truly puzzled by the statement of the panel opinion that the allegiance of a MIS is “diminished somewhat” because it has no employees from the UAE and a large percentage of its employees are from the United States. When, where, and how did the “allegiance” of a corporate entity come to be determined (or “diminished”) by consideration of the citizenship or nationality of its employees? Does a corporation owe “allegiance” to any nation other than the nation which created it? Would the panel say that a corporation organized under the laws of the state of Delaware is not truly a Delaware corporation for purposes of our diversity law unless most of its employees are from Delaware? I have looked and have not found any Supreme Court or any Fifth Circuit decision which has applied United States law to determine the rights and obligations between a citizen of the United States who is injured in a foreign country during the course and scope of his employment with a corporate entity organized under the law of that foreign country. In my judg*894ment, the panel opinion improvidently extends United States law to the set of circumstances involved in this case by giving greater weight to the allegiance of the defendant shipowner instead of to the allegiance of the defendant employer.
Finally, I question the correctness of the panel decision in evaluating the place of contract factor in the Lauritzen-Rhoditis analysis. Here again, the majority misconstrues the significance'of this factor. I recognize that Coats was recruited by representatives of MIS at his home in Mississippi and that the basic terms of his employment agreement were negotiated and orally agreed upon during this recruitment visit. However, it is clear beyond doubt that he was recruited and “employed” to work in the United Arab Emirates and not aboard any vessel. Furthermore, it is clear that in order to get the necessary visa to enter the United Arab Emirates, Coats and MIS “executed an Arabic contract,” and that Coats then applied for and received the necessary work permit from the UAE which would permit him to reside there during his employment. This circumstance of a work permit is a special factor present in this case which has not been present in any of the other choice of law cases cited in the majority opinion; and, in my view, necessitates a determination that the law of the UAE should apply to an injury occurring in the UAE during employment under a work permit.
In his original appellee’s brief, Coats argued: “U.S. Maritime Law applies whenever a U.S. citizen is injured on a U.S. flag drilling vessel anywhere in the world.” (p. 52). The cases cited by Coats as precedent for that proposition do not support his assertion. But the majority opinion in effect arrives at the same conclusion by misinterpretation and misevaluation of the Lauritzen-Rhoditis factors. Because I think such a conclusion is bad law under the facts of this case, and will produce undesirable effects when applied as a precedent, I would reverse the district court’s judgment and remand the case to the district court for retrial in accordance with the laws of the United Arab Emirates.
In arriving at this result, I rely on the following line of Fifth Circuit eases: Chiazor v. Transworld Drilling Co., Ltd., 648 F.2d 1015 (1981); Zekic v. Reading & Bates Drilling Co., 680 F.2d 1107 (1982); Bailey v. Dolphin Intern., Inc., 697 F.2d 1268 (1983); Koke v. Phillips Petroleum Co., 730 F.2d 211 (1984); Schexnider v. McDermott Intern., Inc., 817 F.2d 1159 (1987); and Fogleman v. Aramco, 920 F.2d 278 (1991). All of these involve “nontraditional” vessels similar in nature and function to the Penrod 69 and all of which determined that the law of another nation, other than the United States, applied.