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Fortis Corporate Insurance, SA v. Viken Ship Management AS

March 10, 2010

FORTIS CORPORATE INSURANCE, SA, PLAINTIFF-APPELLEE/CROSS-APPELLANT,
v.
VIKEN SHIP MANAGEMENT AS, DEFENDANT-APPELLANT/CROSS-APPELLEE.



Appeal from the United States District Court for the Northern District of Ohio at Toledo. No. 04-07048-Jack Zouhary, District Judge.

The opinion of the court was delivered by: Sandra Day O'connor, Associate Justice (Retired).

RECOMMENDED FOR FULL-TEXT PUBLICATION Pursuant to Sixth Circuit Rule 206

Argued: October 14, 2009

Before: O'CONNOR, Associate Justice (Ret.);*fn1 MOORE and COOK, Circuit Judges.

OPINION

This is a maritime shipping case involving a claim for rust damage to steel coils caused by exposure to seawater during a journey from Szczecin, Poland to Toledo, Ohio. The central issue in this appeal is whether a ship manager charged with providing a Master, officers and crew, and performing various other ship-management tasks for the shipping vessel qualifies as a "carrier" under the Carriage of Goods by Sea Act (COGSA). We agree with the district court's finding that such a manager is not a COGSA carrier, and therefore COGSA's one-year statute of limitations does not bar the underlying suit. We also reject Appellant's argument that the district court's judgment rested on clearly erroneous factual findings, and we AFFIRM.

I.

Fortis Corporate Insurance insured a cargo of 176 steel coils belonging to Metallia LLC. The coils were carried from Szczecin, Poland to Toledo, Ohio aboard the M/V Inviken, a 17,313 gross ton bulk carrier. During the journey, seawater entered the cargo hold containing the steel coils and caused significant rust damage to 99 of them. Fortis, as underwriter, paid Metallia $375,000 for the damage to the steel coils. Fortis then brought a lawsuit as Metallia's subrogee, alleging negligence and breach of bailment against the Inviken's owner, Viken Lakers, along with the ship's manager, Viken Ship Management (VSM).

Fortis I

This dispute has previously come before this court. See Fortis Corporate Ins. v. Viken Ship Mgmt., 450 F.3d 214 (6th Cir. 2006). We provide a brief account of the facts giving rise to the earlier appeal because they are relevant to some of the issues presented here.

In 1998, FedNav International (a Canadian company) chartered the Inviken from Viken Lakers for a period of several years. This arrangement is referred to as a time charter; it basically allowed FedNav to use the Inviken to transport cargo on an as-needed basis for the duration of the charter period. In the time-charter agreement, Viken Lakers provided FedNav with assurances that the Inviken was fit to traverse the Great Lakes and, more specifically, that it was a suitable vessel for use in the Toledo port. In 2002, Metallia subchartered the Inviken from FedNav for the Toledo-bound voyage transporting the cargo of steel coils at issue in this case. When the steel coils were damaged during that voyage, Fortis (as Metallia's subrogee) brought suit against Viken Lakers and VSM alleging negligence and breach of bailment.

The United States District Court for the Northern District of Ohio initially dismissed Fortis's lawsuit, finding that it lacked personal jurisdiction over Viken Lakers and VSM (Norwegian companies). The district court noted that the touchstone of personal jurisdiction is whether the defendant purposefully established "minimum contacts" in the forum state, such that it could anticipate being haled into court there. See Asahi Metal Indus. Co. v. Superior Court of Cal., 480 U.S. 102, 108--09 (1987) (plurality opinion); World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 297 (1980). In evaluating the jurisdictional arguments, the district court found that Viken Lakers and VSM were "in essence, the same company," and concluded that there was no jurisdiction because Viken Lakers and VSM had not established the necessary minimum contacts in Ohio. It reasoned that Viken Lakers derives its income from providing its ships to time-charterers, none of whom were American; it was FedNav, not Viken Lakers or VSM, that chose to use the Inviken to ship through the Toledo port. The court concluded that providing a ship to a Canadian company did not establish the necessary contacts with Ohio, even though the Canadian company made clear its intent to use the ship to carry cargo to Ohio.

Fortis appealed that judgment, and this court reversed. In finding that there was jurisdiction over Viken Lakers and VSM, a panel of this court explained:

[D]efendants outfitted and rigged their ships to sail into the Great Lakes. Defendants confirmed in the Charter Agreement that "the vessel is suitable for Toledo." Defendants' officers testified that the vessels were rigged to travel to the Great Lakes. They entered into a long-term agreement with a charterer that made its money shipping into the Great Lakes. Not counting travel time, they earned $558,000 for the number of days spent in Ohio ports ...


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