The opinion of the court was delivered by: TENNEY
On November 10, 1975, while en route from Kobe, Japan to New Orleans, Louisiana, and other ports, the S.S. Eurypylus sustained an explosion and fire at sea. After unsuccessfully fighting to control the fire, the crew abandoned the vessel. On November 17, 1975, the first claim for failure to deliver cargo was filed in this Court. Following that filing, the owner of the vessel, Ta Chi Navigation (Panama) Corp., S.A. ("Ta Chi"), filed a complaint seeking exoneration from or limitation of liability. Among the many claimants in the limitation proceedings are personal injury and death claimants. At the time that the original claims were filed, Elpidio B. Donato and Gregorio S. Fernandez were the personal injury claimants, and Adelaida M. Fernandez, widow of Elizalde Fernandez, sued individually, as guardian of the estate of her minor children, and as the personal representative of the estate of her deceased husband. On November 28, 1977, Gregorio Fernandez, still hospitalized from injuries received in the explosion and fire, died. His widow, Delia Ruiz Fernandez, has since entered this lawsuit for herself, her children, and her husband's estate. In May 1978, Elpidio Donato and Delia Ruiz Fernandez moved for summary judgment for maintenance and cure. Specifically, the claimants in that motion sought maintenance and cure, damages, prejudgment interest, burial expenses, attorneys' fees, and costs. Finding that genuine issues of material fact remained to be tried, the Court denied the motion for summary judgment in a memorandum endorsement dated August 8, 1978. The Court made no finding regarding the governing law in the litigation of the personal injury and death claims. That choice of law is now before the Court. After examining the record, the Court concludes that it must hold a hearing to develop further the facts essential to determining the applicable law.
The facts about which there appears to be no dispute include the following. The explosion and fire occurred while the Eurypylus, a vessel flying the Panamanian flag, was in international waters en route from Japan to Gulf and east coast ports in the United States and to various Caribbean ports. The personal injury and death claimants were all citizens of the Republic of the Philippines. The two claimants surviving after the accident were treated first in the United States, then returned to the Philippines. Each had signed shipping articles in the Philippines, and each such contract provided for the application of either Panamanian Maritime Law or Philippine Labor Law, whichever was found to be more beneficial to the seamen. At the time of the explosion and fire, the Eurypylus was owned by Ta Chi, a Panamanian corporation. The vessel was then under the management, charter, or operation of Ta Peng Steamship Co., Ltd. ("Ta Peng"), the latter's precise relationship with Ta Chi needing further clarification.
The claimants argue that their claims have substantial contacts with the United States and that, accordingly, United States general maritime law and the Jones Act, 46 U.S.C. § 688 ("Jones Act" or the "Act"), should apply. Ta Chi argues, Inter alia, that the claims lack a substantial relationship with the United States and that in the interests of comity the claimants should be left to their contractual benefits as interpreted by the National Seamen's Board of the Republic of the Philippines. In order to avoid repetition, the parties' specific arguments will be stated and addressed in the discussion of various alleged contacts between the claims and the United States.
The Jones Act provides that "(a)ny seaman who shall suffer personal injury in the course of his employment may . . . maintain an action for damages at law." Read literally, the Act requires not even the slightest connection between the seaman, the employment, or the injury and the United States. "(A) hand on a Chinese junk, never outside Chinese waters, would not be beyond its literal wording." Lauritzen v. Larsen, 345 U.S. 571, 576-77, 73 S. Ct. 921, 925, 97 L. Ed. 1254 (1953). Courts have, however, restricted the application of the Act. In Lauritzen, the Supreme Court held that the hiring of the injured seaman in the United States, returning him here, and having a forum in the United States were insufficient bases for applying the Jones Act. Although the seaman had stressed the owner's frequent and regular contact with American ports, the Court appears to have given it no weight in assessing the contacts between the claim and the United States. Id. at 581-82, 73 S. Ct. 921.
In broad dicta, the Court discussed criteria that influence the determination of applicable law in maritime tort claims. The seven criteria are the place of the wrongful act, the law of the flag, the allegiance or domicile of the injured seaman, the allegiance of the shipowner, the place of contracting, the inaccessibility of a foreign forum, and the law of the forum. Id. at 583-92, 73 S. Ct. 921. In Romero v. International Terminal Operating Co., 358 U.S. 354, 381-84, 79 S. Ct. 468, 3 L. Ed. 2d 368 (1959), the Court concluded that the Lauritzen factors applied with equal force under general maritime law as well as to the Jones Act and held that New York injury and treatment were insufficient bases for the application of United States law.
In Hellenic Lines Ltd. v. Rhoditis, 398 U.S. 306, 90 S. Ct. 1731, 26 L. Ed. 2d 252 (1970), the Supreme Court was again faced with the question of the Jones Act's reach. Focusing on the question whether the shipowner was an "employer" under the Act, five members of the Court agreed that the Jones Act should apply. Four of the Lauritzen factors favored the owner, but the Court reasoned that the Lauritzen test is not a mechanical one to be applied by weighing the factors. Rather, the Court stated, a decision must be made in light of the national interest served by the Jones Act whether the contacts between the transaction and the United States are "substantial." Id. at 308-09 & n. 4, 90 S. Ct. 1731, Quoting at length Bartholomew v. Universe Tankships, Inc., 263 F.2d 437, 441 (2d Cir.), Cert. denied, 359 U.S. 1000, 79 S. Ct. 1138, 3 L. Ed. 2d 1030 (1959). Furthermore, the Court reasoned that the list of factors in Lauritzen is not exhaustive. Another factor of importance in determining whether the Jones Act is applicable is the owner's base of operations. Rhoditis, supra, 398 U.S. at 309, 90 S. Ct. 1731, Citing Pavlou v. Ocean Traders Marine Corp., 211 F. Supp. 320, 324-25 (S.D.N.Y.1962). In Rhoditis, the base of operations contact was established because the shipowner, although a Greek corporation, was ninety-five percent owned by a Greek citizen who had resided in the United States since 1945 and who managed the corporation from offices in New York and New Orleans. Additionally, the ship on which the seaman had worked was engaged in regular runs to and from the United States: its entire income was derived from cargo originating or terminating in the United States. "We see no reason whatsoever to give the Jones Act a strained construction so that this alien owner, engaged in an extensive business operation in this country, may have an advantage over citizens engaged in the same business by allowing him to escape the obligations and responsibility of a Jones Act "employer.' " Rhoditis, supra, 398 U.S. at 310, 90 S. Ct. at 1734.
In Bartholomew, supra, 263 F.2d at 439-41, the Second Circuit confronted the "vagueness" and "lack of any common principle of decision" in the Jones Act law and concluded that the Jones Act may be applied if the contacts are substantial, I. e., if the facts present "something between minimal and preponderant contacts." Id. at 440.
(E)ach factor is to be "weighed" and "evaluated" only to the end that, after each factor has been given consideration, a rational and satisfactory conclusion may be arrived at on the question of whether all the factors present add up to the necessary substantiality. Moreover, each factor, or contact, or group of facts must be tested in the light of the underlying objective, which is to effectuate the liberal purposes of the Jones Act.
Id. at 441. Based on contacts, substantial in the aggregate, that the injury, the seaman, and the employer had with the United States, the Bartholomew court held the Jones Act applicable to the transaction.
Subsequent Second Circuit cases have pursued this broad inquiry into contacts between transactions and the United States, and in the process they have further identified the kinds of factors that are relevant to the question whether the Jones Act is applicable. See Antypas v. Cia. Maritima San Basilio, S.A., 541 F.2d 307 (2d Cir. 1976), Cert. denied, 429 U.S. 1098, 97 S. Ct. 1116, 51 L. Ed. 2d 545 (1977); Moncada v. Lemuria Shipping Corp., 491 F.2d 470 (2d Cir.), Cert. denied, 417 U.S. 947, 94 S. Ct. 3072, 41 L. Ed. 2d 667 (1974) (both discussed Infra ).
In Lauritzen dicta, Supra, 345 U.S. at 584-85, 73 S. Ct. at 929-930, the Supreme Court considered the law of the flag to be "(perhaps) the most venerable and universal rule of maritime law," a factor that "overbears most other connecting events in determining applicable law." Here, the claimants do not dispute that the Eurypylus flew the Panamanian flag. They argue, however, that the Panamanian flag is merely a "flag of convenience" entitled to no weight in this determination. In this contention they are correct. In Lauritzen, the Supreme Court, even while recognizing the importance of the ship's flag, acknowledged the practice of seeking foreign registration to avoid stringent shipping laws. Id. at 587, 73 S. Ct. 921. This practice will not insulate an owner from the Jones Act. E. g., Bartholomew, supra, 263 F.2d at 441-42, Approved in Rhoditis, supra, 398 U.S. at 310, 90 S. Ct. 1731; Pavlou, supra, 211 F. Supp. at 323-24. The record in this case establishes that Ta Chi and the Eurypylus were without ties to Panama beyond mere registration. See, e.g., Ta Chi's Answers to Interrogatories, dated February 6, 1978, at PP 2, 3, 12, 27 (owners, officers, directors, operators, and agent not Panamanian); Deposition of O. Arnold Larsen, taken March 10, 1978, at 14 ("Larsen Deposition") (business not Panamanian). The illusory nature of the flag of the Eurypylus, while it does not lend substantially to American contacts, does preclude resort to the law of the ship's flag, on the basis of registration alone, to govern the instant claims.
Allegiance of the Shipowner
The discussion under "Law of the Ship's Flag" applies with equal force here. To effectuate the liberal purposes of the Jones Act, "the facade of the operation must be considered as minor, compared with the real nature of the operation and a cold objective look at the actual operational contacts that this ship and this owner have with the United States." Rhoditis, supra, 398 U.S. at 310, 90 S. Ct. at 1734, Citing Bartholomew, supra, 263 F.2d at 442. The Court clearly may look, as claimants urge, beyond the Panamanian corporation to its ownership. In so doing, the Court finds the record unclear as to the extent of American ownership. Byron P. Shaw, a director and officer of Ta Chi, and a brother to one of its major stockholders, told Arnold Larsen, vice-president of the operator's agent at the time of the explosion and fire, that Shaw owned twenty percent of Ta Chi. Larsen Deposition at 9-10, 41. Shaw was then a naturalized American citizen residing in the United States. Id. at 10. Ta Chi, however, when asked to list its stockholders up to the time of the accident, suggested that Shaw is not now an owner. Ta Chi's Answer to Interrogatories P 2. Ta Chi equivocated similarly in answer to a later question, responding ...