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IN RE AMERICAN PRESIDENT LINES

June 27, 1995

In the Matter of the Complaint of AMERICAN PRESIDENT LINES, LTD., as Owner of M/V PRESIDENT WASHINGTON, for Exoneration from or Limitation of Liability, In re the Complaint of HANJIN SHIPPING COMPANY, LTD., as Bareboat Charterer, and HIGHLIGHT NAVIGATION CORPORATION, as the sole owner of the vessel HANJIN HONG KONG, Lloyd's and IMO No. 8502896, for Exoneration from or Limitation of Liability.

ROBERT W. SWEET, U.S.D.J.


The opinion of the court was delivered by: ROBERT W. SWEET

Motions are before this Court relating to forum non conveniens, transfer of venue and choice of law in two related limitation proceedings arising out of the collision of two vessels in Korean waters.

 For the reasons set forth below, in the limitation proceeding (the "APL Action") brought by American President Lines, Ltd. ("APL"), APL's motion to strike the Fifth affirmative defenses of Hanjin Shipping Company Ltd. ("Hanjin") and Highlight Navigation Corporation ("Highlight") (together the "Hanjin Claimants") regarding Korean law will be granted and that defense will be stricken with leave to replead. APL's motion for summary judgment as to the Hanjin Claimants' Sixth and Seventh affirmative defenses the APL Action will be granted.

 In a related limitation action brought by Hanjin (the "Hanjin Action"), Hanjin's motion to dismiss that action on forum non conveniens grounds will be denied.

 In the APL Action, APL and numerous cargo claimants move to strike affirmative defenses raised by Hanjin and Highlight in their Answer, these defenses being the Hanjin Claimants' Fifth, Sixth and Seventh affirmative defenses, respectively asserting that: (i) Korean law governs all claims in the APL action (Fifth); (ii) the APL action should be dismissed on grounds of forum non conveniens (Sixth); and (iii) venue should be transferred to the Western District of Washington (Seventh). At an initial hearing this Court determined to treat this motion as one for summary judgment regarding the forum non conveniens and venue transfer defenses, since these defenses turned on questions of fact, and the motion was so deemed. The parties were granted an opportunity and additional time to supplement their submissions, further argument was heard, and the motion is now considered as one for summary judgment as to the affirmative defenses.

 In the Hanjin Action, which was commenced by Hanjin and Highlight in the U.S. District Court for the Western District of Washington on October 25, 1994 and subsequently transferred to this Court and accepted as related the APL Action, Hanjin and Highlight move for dismissal on grounds of forum non conveniens.

 APL is a Delaware corporation engaged in worldwide shipping, with its principal place of business in Oakland, California. APL is the owner of the President Washington, an American-flag vessel. Hanjin is a Korean corporation engaged in worldwide shipping, with its principal place of business in Seoul, Korea. Highlight is a Liberian corporation whose only place of business is Monrovia, Liberia. Hanjin is the bareboat charterer and Highlight is the owner of the Hanjin Hong Kong, a Liberian-flag vessel.

 Prior Proceedings

 The APL Action

 In the period immediately following the collision of the Hanjin Hong Kong and the President Washington on May 2, 1994 (the "Collision") in the territorial waters of the Republic of Korea ("Korea"), six lawsuits were filed in this Court which named either Hanjin or Highlight or both, as defendants, two of which also named APL as a defendant. APL filed for concursus under the Limitation of Liability Act, 46 U.S.C. § 185 on October 24, 1994, thus commencing the APL Action for exoneration from, or limitation of, liability. On November 7, 1994 this Court issued an Order setting a deadline for the filing of claims pursuant to Supplemental Rule F(4), Fed. R. Civ. P. Hanjin Shipping Company Ltd. and Highlight Navigation Corporation (together "Hanjin") are claimants in the APL Action. Hanjin filed its Answer on January 4, 1995, asserting, inter alia, the affirmative defenses at issue in the APL Action.

 Commencing shortly after the Court's November 7 Order, various cargo claimants filed notices of claim, and continued to do so through the deadline of January 5, 1995. By that date claims had been filed by over 250 claimants totalling over $ 40,000,000, including a claim by the Hanjin Claimants seeking $ 7,600,000. Numerous cargo claimants also filed answers in the early part of this year. During the pendency of the within motions several motions to file late claims, all unopposed, were made by additional cargo claimants, and granted.

 APL filed the within motion on January 26, 1995. By notices filed in early February of 1995, numerous cargo claimants joined in APL's motion and submitted memoranda in support thereof. Hanjin submitted its opposition to APL's motion to strike on March 1, 1995. APL filed a Reply Memorandum on March 6, 1995. Various cargo claimants filed their Reply Memoranda shortly thereafter. Hanjin filed a Sur-Reply Memorandum on March 15, 1995.

 Upon consent of the parties and with permission of the Court the return date of APL's motion was adjourned twice. Oral argument was initially heard on March 22, 1995. At that time it was determined by this Court to treat APL's motion to strike the Hanjin Claimants' Sixth and Seventh affirmative defenses as one for summary judgment on the same defenses and the motion to strike was so deemed on that date, regarding those two defenses. The parties were afforded additional opportunity and time to supplement their submissions and the motion was deemed fully submitted on April 19, 1995.

 The Hanjin Action

 Hanjin commenced the Hanjin Action, as mentioned above, on October 25, 1994 in the Western District of Washington. On October 28, 1994 that Court issued an Order enjoining further claims against Hanjin and directing notice to be issued to potential claimants to file claims no later January 25, 1995. On December 2, 1994, Hanjin filed the instant motion to dismiss on grounds of forum non conveniens. On December 9, 1994, APL moved for a transfer of venue to this Court. That motion was ultimately granted, and the Hanjin Action was transferred to this Court by Order of the Honorable Carolyn R. Dimmick, Chief Judge, U.S. District Court, Western District of Washington, on April 10, 1995. This Court accepted the Hanjin Action as related to the APL Action on May 23, 1995.

 In the Hanjin Action, Hanjin moves for dismissal based on grounds of forum non conveniens. Because resolution of the motions in the two actions require resolution of common questions of law and turn on common issues of fact, they are taken together.

 On October 21, 1994, Hanjin filed an action in Seoul, Korea District Court, Docket No. 94 PA 7835, petitioning for limitation of liability pursuant to the Korean Commercial Code articles 746 and 747. Hanjin requested that the decision of the Seoul District Court on commencement of the limitation proceedings be delayed until this Court rules on the issue of forum non conveniens and that action has been dormant since then.

 The Facts

 On May 2, 1994, the President Washington and the Hanjin Hong Kong collided in the territorial waters of Korea in the vicinity of the port of the city of Pusan. The Hanjin Hong Kong was outbound headed for Osaka, Japan. The President Washington was inbound from Taiwan to Pusan to discharge and load cargo. The weather conditions were foggy and visibility was limited. Both ships took last minute measures to avoid the collision, but at about 10:26 p.m. local time, the President Washington and the Hanjin Hong Kong collided. The Kota Berani, a Singapore-flag vessel engaged predominantly in Far East trade, was in close proximity to the two vessels at the time of the Collision.

 Both vessels sustained extensive hull damage. Cargo aboard the President Washington was damaged. None of the Hanjin Hong Kong's cargo was damaged. After the Collision, the Hanjin Hong Kong and the President Washington entered Pusan harbor for cargo, hull, and container damage surveys. Nearly all the Hanjin Hong Kong cargo was discharged, surveyed, and/or transhipped at Pusan to other vessels or modes of transportation onward to the intended destinations.

 While attempting to dock after the accident, the President Washington ran aground. As a result, she suffered bottom damage. Liability for the bottom damage is an issue in the Hanjin Action.

 The President Washington, after de-ballasting to get off the bottom, proceeded to a berth at the Pusan East Container Terminal ("PECT") where cargo containers were off-loaded, surveyed, disposed of and/or transhipped. On May 7, 1994, five days after the Collision, a fire broke out aboard the President Washington while she was at the PECT berth in Pusan. Five cargo containers were jettisoned from the President Washington during efforts to extinguish the fire. Five additional containers were damaged by the fire. Both vessels were repaired at shipyards in Korea.

 The President Washington is an 860 foot U.S.-flag container ship, owned by APL whose corporate headquarters is in Oakland, California. Documents relating to the maintenance and condition of the President Washington prior to the Collision, and surveys of and repairs carried out on the President Washington after the Collision are in APL's possession in the United States. All crew members aboard the President Washington on the day of the collision are U.S. citizens.

 The Hanjin Hong Kong is a 732-foot Liberian-flag container ship, presently owned by Highlight Navigation Corporation, a Liberian corporation. The Hanjin Hong Kong was and is bareboat chartered on a "charter hire purchase basis" to Hanjin. The Hanjin Hong Kong makes U.S. port calls in Seattle, Washington and Portland, Oregon. All vessel records, voyage records, and survey and damage repair records for the Hanjin Hong Kong are in Korea. All crew members aboard the Hanjin Hong Kong on the day of the Collision reside in Korea. Following the Collision the Master of the Hanjin Hong Kong resigned from Hanjin and now works for another company in Korea and is beyond the control of Hanjin.

 Both vessels and their cargo were surveyed by Korean surveyors after the accident.

 APL is headquartered in Oakland, California. APL maintains offices in Pusan and Seoul, South Korea. APL also maintains offices and operations in Seattle.

 Hanjin is headquartered in Seoul, Korea. It has North American regional headquarters in Long Beach, California and maintains offices and operations in New York, Atlanta, Baltimore, Boston, Chicago, Cincinnati, Cleveland, Dallas, Houston, Memphis, Minneapolis, Norfolk, Orlando, Portland, San Francisco, Savannah, Seattle, St. Louis, and Wilmington. Hanjin vessels regularly call at the American ports of Savannah, Wilmington, New York, Long Beach, Oakland, Seattle and Portland.

 The U.S. Coast Guard Marine Safety Office in Honolulu, Hawaii investigated the Collision. Summaries of interviews conducted with President Washington crew ...


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