Commercial Litigation and Arbitration

Weak Position Not Frivolous Where Magistrate Judge Ordered Discovery on It and Appellate Judge Voted for Oral Argument — Forum Non Conveniens in Maritime Cases

From Vesuna v. CSCS Int’l N.V., 2010 U.S. App. LEXIS 25531 (11th Cir. Dec. 13, 2010):

Vesuna, a resident of India, sustained a serious back injury while working for Cruise Ship Catering Services ("CSCS") aboard a cruise ship owned by Costa Crociere ("Costa"). Vesuna's employment contract contained the following choice of law provision:

Any question that may arise concerning the application of laws, or of the terms and conditions of this Contract or of individual agreements, shall be subject to the jurisdiction of the Court of Genoa (ITALY), which shall conduct the compulsory arbitration and settlement procedure laid down for such cases.


After the case was removed to federal court, Costa filed a motion to dismiss for forum non conveniens.***

A magistrate judge granted Vesuna's request for jurisdictional discovery. CSCS and Costa filed objections to the magistrate judge's recommendation and several months later the district court reversed. Vesuna then perfected this appeal claiming that it should have been permitted limited jurisdictional discovery prior to the court ruling on the motion to dismiss. CSCS and Costa filed a motion for costs and fees based on the fact that this appeal represents the fifth time in six years Vesuna's counsel has challenged Costa's business relationship with the U.S. on appeal to this court. ***

A. Forum Non Conveniens

In maritime cases, the decision whether to dismiss on forum non conveniens involves a two-step analysis. First, the court decides whether United States law applies and, second, if it does not, then applies the traditional analysis for forum non conveniens. The Supreme Court has established a non-exclusive list of factors to consider when deciding whether United States law applies. The factors are: (1) the place of the wrongful act; (2) the law of the flag; (3) the allegiance or domicile of the injured party; (4) the allegiance of the defendant ship owner; (5) the place of contract; (6) the inaccessibility of the foreign forum; (7) the law of the forum; and (8) the ship owners place of operations. Hellenic Lines, Ldt. v. Rhoditis, 398 U.S. 306, 309 (1970). ***

B. Sanctions

By motion to this court, the appellees request costs, expenses and attorneys' fees, pursuant to 28 U.S.C. § 1927. ***

After reviewing the record, reading the parties' briefs and having the benefit of oral argument, we deny the appellee's request for sanctions under § 1927. The suit brought by Vesuna is not frivolous. Initially, a magistrate judge agreed that jurisdictional discovery would be helpful. The question of frivolity is further complicated by the fact that at least one member of this court determined that the issues presented in this appeal warranted oral argument. Accordingly, we are unable to hold that there was absolutely no basis for the appeal in the first place. Additionally, CSCS and Costa have filed a motion for Rule 11 sanctions in the district court which is now pending. Rule 11 seems a much better vehicle for applying sanctions should the district court deem them warranted.

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