Establishing Personal Jurisdiction: Negligence Claims Against a Foreign Corporation
Carmona v. Leo Ship Mgmt., 924 F.3d 190 (U.S. App. 5th Cir. May 10,2019).
By: Kelicia D. Raya
In this opinion delivered by Circuit Judge Smith, the U.S. Fifth Circuit Court of Appeals affirmed in part, vacated in part, and remanded the district court’s granting of defendant’s motion to dismiss for lack of personal jurisdiction. The plaintiff in this case, Carmona, worked as a stevedore and was tasked with unloading cargo from the M/V KOMATSUSHIMA STAR in April 2014. While he was rigging a bundle of pipes in the ship’s hold, the pipes fell and injured his ankle. Defendant, LSM, is a Philippine corporation with its principal place of business in Manila.
In 2009, LSM contractedwith the owners of the M/V KOMATSUSHIMA STAR to serve as ship manager. Asmanager, part of LSM’s duties was to supply and supervise the crew and arrangefor necessary repairs and maintenance to ensure compliance with the laws of theplaces where the vessel docks. LSM did not have control over where the shiptraveled; nonetheless, the ship management contract required the ship ownersand LSM “to maintain close communication with each other and to share relevantinformation regarding the ship’s schedule and port information.”[1]Ultimately, Plaintiff brought suit against LSM alleging that LSM breached itsduty to (1) stow the pipes properly, (2) minimize hazards associated withfalling pipes, (3) take precautions to protect workers, (4) provide a safe workenvironment, (5) turn over the vessel in a safe condition for discharging cargo,(6) warn of hidden dangers, and (7) intervene.[2]
The Fifth Circuit reviewedthis ruling on personal jurisdiction denovo. The court applied thestandard that there is personal jurisdiction if the forum state’s long-armstatute extends to the nonresident defendant and if the exercise ofjurisdiction comports with due process. In evaluating whether due processpermits the exercise of specific jurisdiction, the court considered a threeprong test: (1) whether the defendant has minimum contacts with the forumstate, i.e., whether it purposely directed its activities toward the forumstate or purposefully availed itself of the privileges of conducting activitiesthere, (2) whether the plaintiff's cause of action arises out of or resultsfrom the defendant's forum-related contacts, and (3) whether the exercise ofpersonal jurisdiction is fair and reasonable.[3]
The majority held the firstprong was met because LSM purposely availed itself of Texas when its employeesvoluntarily entered the jurisdiction aboard the vessel. Although LSM had nocontrol over the vessel’s course, it was aware of the ship’s schedule throughits communications with the ship’s owner. The second prong, however, was notestablished by the court for each of plaintiff’s claims as a plaintiff bringingmultiple claims must establish personal jurisdiction for each claim. LSMconceded that most of plaintiff’s claims resulted from its conduct in Texasafter the ship’s arrival there. However, LSM denied the claim of negligence instowing the pipes properly. LSM went on to present the court with undisputedevidence that a third party had stowed the pipes aboard the vessel while it wasoutside of the United States. Thus, the second prong was not met as to theclaim of negligently loading the pipes. As a result, the Fifth Circuit affirmedthe district court’s dismissal for want of personal jurisdiction as to the claimof failure to load the pipes properly but remanded the remaining claims to thedistrict court to establish the second prong and personal jurisdiction.
[1] Carmona v. Leo Ship Mgmt., No. 18-20248,2019 U.S. App. LEXIS 14070, at *2 (U.S. App. 5th Cir. May 10, 2019).
[2] Id. at *3.
[3] Id. at *4.
