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Tsakonites v. Transpacific Carriers Corp.

decided: November 16, 1966.

ELIAS TSAKONITES, PLAINTIFF-APPELLANT,
v.
TRANSPACIFIC CARRIERS CORP. AND HELLENIC LINES, LTD., DEFENDANTS-APPELLEES



Lumbard, Chief Judge, and Waterman and Moore, Circuit Judges. Waterman, Circuit Judge (dissenting).

Author: Moore

MOORE, Circuit Judge:

Plaintiff, a Greek seaman, brought suit in the Southern District of New York, relying entirely upon the Jones Act and the general maritime law of the United States. The District Court dismissed the case on the merits on the grounds that plaintiff had failed to establish the applicability of American law. From this judgment plaintiff appeals.

The sole question presented on this appeal is whether the Jones Act, 46 U.S.C. ยง 688, and the general maritime law of the United States apply to an accident in an American port to a foreign seaman on a ship owned by a foreign corporation and flying a foreign flag, where the principal shareholder of the foreign corporation, though a foreign citizen, resides in America, and where the operations of the ship on which the injury occurred were controlled from this country.

Elias Tsakonites, a Greek citizen and domiciliary, the plaintiff-appellant, signed on as a member of the crew of the SS Hellenic Spirit under an agreement dated Piraeus, Greece, June 4, 1959, which provided that any claim arising from his employment was to be tried exclusively by the Greek law courts. Plaintiff boarded the Hellenic Spirit on June 5, 1959, at Herakleion, Crete. The ship was then on the outward leg of a voyage from Houston, Texas, to Rangoon, Burma, with numerous stops in between. After reaching Burma, the ship sailed back through the Red Sea and the Mediterraneans, stopping at New York and Philadelphia before finishing its inward voyage in Cuba. The accident which gave rise to the present suit occurred while the Hellenic Spirit was berthed at a pier in Brooklyn. On September 26, 1959, while descending a ladder from the main deck to the interior of a hold, plaintiff fell to the deck below. He was taken to the Lutheran Medical Center in Brooklyn, where he remained until January 20, 1960.

The Hellenic Spirit at all times relevant to this suit sailed under the Greek flag and was registered under the laws of Greece. Her crew and officers were almost entirely Greek. She was owned by the defendant Transpacific Carriers Corp., a Panamanian corporation wholly owned by the defendant Hellenic Lines, Ltd., a Greek corporation, over 96% of the shares of which were owned by Pericles G. Callimanopoulos, a Greek citizen, who first came to this country in 1945. From 1945 to 1956 or 1957, he spent part of his time here, first as a visitor, then as a treaty trader. In 1956 or 1957, he was admitted to the United States as a permanent resident.

With the exception of Callimanopoulos and his son, all of the officers and directors of Hellenic Lines reside in Greece as well as being Greek citizens. However, the directors from time to time vested in Callimanopoulos a broad power of attorney to run the company as General Manager.

Hellenic Lines maintains an office in Piraeus and a slightly smaller office in New York City, in addition to smaller offices in this country and abroad. In August 1959, the New York office employed 63 people at a payroll cost of approximately $28,000 per month. The company's annual statement was prepared in New York. Hellenic Lines maintains bank accounts in New York banks and has borrowed extensively from New York banks.

Hellenic Lines at the time of the accident operated from New York 22 or 23 vessels engaged in three liner services: to the Mediterranean; to the Persian Gulf; and to the Red Sea and India and Burma. The company's agents at ports of call reported to the New York office on all matters concerning these three liner services. The Hellenic Spirit was engaged in the Red Sea liner service.

The starting point of any discussion of the applicability of American law to seaman's accidents must be Lauritzen v. Larsen, 345 U.S. 571, 73 S. Ct. 921, 97 L. Ed. 1254 (1953), in which the Supreme Court listed and appraised seven factors which should be considered in balancing the need for fairness to a plaintiff and the legitimate interests of the United States against the policies underlying international comity. Those seven factors are: the place of the wrongful act -- a factor to which the Supreme Court attributed little weight, because of the disruptive effects adherence to such a standard would have upon the uniform regulation of shipboard activities;*fn1 the law of the flag, which factor, the Supreme Court said, must prevail in the absence of some "heavy counterweight," and which generally accords with principles of comity; the allegiance or domicile of the injured party; the allegiance of the defendant shipowner; the place and terms of the contract; the relative inaccessibility of the foreign forum, a factor which the Court found relevant not on the issue of whether law is applicable but rather on whether the court after finding its own law inapplicable should apply the law of some other jurisdiction; and finally the law of the forum, to which the Court attributed very little weight.

Lauritzen did not attempt to indicate whether or not American law should apply under all combinations of listed factors not before the Court. Cases both before and after Lauritzen, however, have established that certain combinations of factors either are or are not enough to justify application of American law. See Note, Admiralty Choice of Law: Lauritzen v. Larsen Applied, 47 Va.L.Rev. 1400 (1961).

The present case presents a combination of factors the significance of which is not conclusively established by existing cases. Defendants contend, and the trial court held, that the record reveals no factors "establishing a connection with the United States * * * sufficient to outweigh the 'venerable and universal rule'" which gives cardinal importance to the law of the flag, Tjonaman v. A/S Glittre, 340 F.2d 290, 292 (2d Cir.), cert. denied, 381 U.S. 925, 85 S. Ct. 1561, 14 L. Ed. 2d 684 (1965). Plaintiff is an alien, who is not even an American resident. His employment contract by its terms limits his rights to those arising under Greek law -- a factor to which weight must be given because it represents plaintiff's jurisdictional choice. Nor can, in this case, the Greek flag of the Hellenic Spirit be said to be a "flag of convenience," within the meaning of cases like Bartholomew v. Universe Tankships Inc., 263 F.2d 437, 440 (2d Cir.), cert. denied, 359 U.S. 1000, 79 S. Ct. 1138, 3 L. Ed. 2d 1030 (1959), and Southern Cross SS Co. v. Firipis, 285 F.2d 651 (4th Cir. 1960), cert. denied, 365 U.S. 869, 81 S. Ct. 903, 5 L. Ed. 2d 859 (1961). The Hellenic Spirit had contacts with Greece apart from being registered there and flying its flag. It stopped there to pick up crews, and not infrequently to discharge cargo. The officers and directors of the company which owned the ship were Greek, as were all of the shareholders of the parent company Hellenic Lines. Greece certainly has enough contacts with the ship so that our courts should hesitate out of consideration before applying and foisting upon it the heavy potential liabilities of the American law of maritime personal injuries. Cf. McCulloch v. Sociedad Nacional de Marineros de Brazil, 372 U.S. 10, 83 S. Ct. 671, 9 L. Ed. 2d 547 (1963) (National Labor Relations Act does not apply to maritime operations of ships owned by foreign subsidiaries of American corporations, crewed by alien seamen).

In favor of jurisdiction are the facts that plaintiff was injured here and spent almost four months in an American hospital; that the headquarters of the ship's activities were located here; and that the general manager and 96% shareholder, although a Greek citizen, is a permanent resident here. The few courts which have previously passed upon the problem have attached considerable significance to the base of business operations, see Southern Cross SS Co., supra, and Pavlou v. Ocean Traders Marine Corp., 211 F. Supp. 320, 322 (S.D.N.Y. 1962) (provision in contract between Greek seaman and Liberian corporation owned by Greeks, Canadians and Americans, stating that Greek law governs), as well as to the residence of the ultimate owners, id. But cf. Cruz v. Harkna, Admiralty Docket No. 176-315 (S.D.N.Y. February 24, 1954), noted in 122 F. Supp. 288 (Honduran law applies despite fact that some of ship's owners, all of whom were Estonian refugees, resided in America).

Wherever, as here, there are various factors to be weighed for and against jurisdiction, the decision must be controlled by the more weighty. This court in its recent Tjonaman decision, supra, faced a simlar problem and resolved it against jurisdiction in our courts. The Supreme Court has given no indication that the law of the flag (when not a flag of convenience) is still not to be considered of paramount importance. Also not to be ignored, is the fact that this Greek seaman whose residence is in Greece, who is or is not presumed to be familiar with the rights and privileges under Greek law of those who serve in the crew on Greek ships, signed articles in which he agreed to be subject to those laws. He doubtless did not have the slightest knowledge of the provisions of American statutes enacted for the benefit of American seamen by our Congress for their protection. It is not unfair to have him abide by his agreement. As said by the Greek government in its amicus brief with respect to these agreements: "These collective bargaining agreements contemplate the hiring of ...


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