Ganpat’s Saga Continues
May 29, 2024
Regular TLB readers may recall the tragic story of Kholkar Vishveshwar Ganpat, an Indian citizen and merchant seaman who lost his toes to malaria, allegedly because his ship failed to stock sufficient antimalarial medicine when it docked at Savannah, Georgia. In 2018, Ganpat sued the ship’s operator, Singapore-based Eastern Pacific Shipping (EPS), in federal district court for the Eastern District of Louisiana. EPS waived objections to personal jurisdiction and venue.
About a year later, however, EPS countersued Ganpat in India, seeking a declaration of non-liability and an injunction ordering him to discontinue his U.S. suit. In response, U.S. District Judge Susie Morgan issued her own antisuit injunction directing EPS to discontinue its action in India, which the Fifth Circuit affirmed on appeal last year. Despite an existing circuit split, the Supreme Court denied cert.
Now the case has returned to the Fifth Circuit, this time on the question of governing law. Judge Morgan heldthat U.S. law (the Jones Act and general maritime law) governs Ganpat’s claims for tort and breach of a collective bargaining agreement. But on May 1, 2024, the Fifth Circuit reversed. Based largely on the fact that Ganpat’s ship flew a Liberian flag, the court of appeals held that Liberian law governs both the tort and contract claims.
The Facts
EPS is an international ship management company, incorporated under the laws of Singapore, with its principal place of business there. A subsidiary of EPS hired Ganpat in India to work on the M/V STARGATE, a Liberian-flagged vessel. He was hired on behalf of Ventnor Navigation, Inc., a Liberian corporation. The employment agreement provided that it would be “governed by and interpreted in accordance with the laws of the state of ships flag [sic] aboard which seaman is employed,” in this case Liberian law. Although EPS operates the M/V STARGATE, the ship is owned by Larchep Shipping, Inc., another Liberian company.
Ganpat alleges that when the ship docked in Savannah, Georgia, EPS failed to provision it with sufficient antimalarial medicine and failed to administer prophylactic antimalarial medicine to the crew before, during, and after its next stop in Gabon. In Gabon, Ganpat contracted malaria and began to suffer symptoms on the high seas during the crossing to Brazil. He was hospitalized for 72 days in Brazil and had his toes amputated before ultimately being returned to India. Ganpat also alleges that EPS failed to pay him disability benefits required under a collective bargaining agreement that was incorporated into his employment contract. Unlike the employment contract, the collective bargaining agreement has no choice of law clause.
Ganpat sued EPS and its subsidiary in federal court in Louisiana. He brought tort claims under the Jones Act and U.S. general maritime law, as well as a claim for breach of the collective bargaining agreement. He subsequently added a tort claim based on the countersuit that EPS filed against him in India. Ganpat sued only EPS, the ship’s operator, and its subsidiary. He did not sue the ship’s owner Larchep for tort or his employer Ventnor for breach of contract.
The District Court’s Decision
The district court held that U.S. law governs both Ganpat’s maritime tort claims and his contract claim. (The court held that Indian law governs his tort claim based on EPS’s countersuit in India applying non-maritime choice of law rules. In this post, I will address only the maritime claims.)
Because this is an admiralty case, the district court did not apply state choice of law rules but rather the approach laid down by the U.S. Supreme Court in Lauritzen v. Larsen (1953) and Hellenic Lines Ltd. v. Rhoditis (1970). In those cases, the Court articulated a non-exhaustive list of eight factors to determine whether U.S. law or by foreign law applies to maritime claims: (1) the place of the wrongful act; (2) the law of the flag; (3) the allegiance or domicile of the injured worker; (4) the allegiance of the defendant shipowner; (5) the place of the contract; (6) the inaccessibility of the foreign forum; (7) the law of the forum; and (8) the shipowner’s base of operations.
Because of the facts and the nature of the claims, the district court deemed many of these factors inapplicable. Relying on decisions from the Second and Fifth Circuits, Judge Morgan concluded that factors referring to the shipowner—factors two, four, and eight—did not apply directly because Ganpat had not sued the ship’s owner. Nevertheless, the judge held that she could consider the allegiance of the named defendant under factor four. Because EPS is a Singapore company, this pointed to Singapore law.
Factors three and five would have pointed to Indian law because Ganpat is an Indian citizen and resident and because the contract was made in India. But these factors carry little weight in blue-water maritime cases because the seaman’s work is transient, and the place of contracting is fortuitous. Factor six—the inaccessibility of the foreign forum—applies only in the forum non conveniens context.
Factor seven favored U.S. law. EPS argued that the law of the forum should not count when the defendant was involuntarily made a party, an argument based on some mistaken dictum in a Fifth Circuit case, but the court noted that this is true of most defendants. Quoting another Fifth Circuit decision, the court reasoned that, because plaintiff brought suit in U.S. court, “[w]hatever weight the law-of-the-forum factor has … tells on the side of the application of United States law.”
In many circuits, the first factor—the place of the wrongful act—would also favor U.S. law because some of the tortious conduct that Ganpat alleged, not provisioning the M/V STARGATE with sufficient antimalarial medicine, occurred at a U.S. port. But the Fifth Circuit has held that the place of injury, rather than the place of conduct, counts as the place of the wrongful act. Because Ganpat began to suffer symptoms on the high seas—and not in the United States, India, Liberia, Gabon, or Singapore—Judge Morgan found that this factor did not favor the law of any potentially relevant state.
Nevertheless, Judge Morgan did consider the defendant’s alleged negligence at Savannah, Georgia as an additional factor, noting that the eight Lauritzen-Rhoditis factors are not exclusive. She also noted the EPS-operated vessels “made hundreds of visits to U.S. ports during the time period surrounding Plaintiff’s injury” and that EPS was not a “casual visitor” to the United States. “[T]he United States has a substantial interest in regulating shipboard behavior in its ports and ensuring that ships leaving its ports are properly provisioned,” Judge Morgan reasoned. “This is a substantial connection that tips the scale in favor of applying United States law.”
Turning to Ganpat’s claim for breach of the collective bargaining agreement, Judge Morgan noted that this agreement—unlike Ganpat’s employment agreement—contained no choice of law clause. Because the collective bargaining agreement was a maritime contract, the same Lauritzen analysis applied, and the court concluded that U.S. law governs.
The Fifth Circuit’s Decision
In an opinion by Judge Kurt D. Engelhardt, the Fifth Circuit reversed. After running through the eight factors, the court of appeals observed that “the only Lauritzen-Rhoditis factor that favors an application of the law of the United States is the seventh factor—the law of the forum” and that this factor is typically given “little weight.”
The district court erred, the Fifth Circuit reasoned, when “it concluded that the ‘law of the flag’ and the ‘base of operations’ factors necessarily lack choice-of-law significance in cases where the shipowner is not a defendant.” Here, EPS was acting in place of the shipowner and therefore “the law of the flag factor maintains at least some significance.”
Judge Engelhardt discounted the fact that allegedly tortious conduct occurred in the United States on the ground that its location was fortuitous. And although EPS was not a “casual visitor” to the United States, it was also visiting lots of other countries. Quoting Lauritzen, the court appeals observed that “[t]he purpose of a conflict-of-laws doctrine is to assure that a case will be treated [i]n the same way under the appropriate law regardless of the fortuitous circumstances which often determine the forum.” “Applying United States law here would achieve the opposite result,” the court continued, because “the substantive law governing the plaintiff’s claims would be determined solely by the fortuitous circumstance of the ship’s transient location at a particular point in its travels.”
Having concluded that U.S. does not govern, the Fifth Circuit turned to the question of what law does. With respect to Ganpat’s breach of contract claim, the court held that Liberian law applies because the “employment contract contains a choice-of-law provision selecting the law of Liberia, and the terms of that agreement are incorporated into the contract upon which [Ganpat’s] claim for disability benefits is based.” This seems wrong to me. The collective bargaining agreement on which this claim is based did not include a choice of law clause. Moreover, this choice of law clause is a narrow one providing that the agreement itself shall be “governed by and construed in accordance with” the law of the flag. The Fifth Circuit has repeatedly held that this kind of clause does not reach claims other than those arising under the agreement.
With respect to Ganpat’s maritime tort claims, the Fifth Circuit emphasized the law of the flag, which “generally is ‘of cardinal importance’ in cases involving traditional maritime shipping activities.” But the court of appeals found no need to remand the case to allow the district court to decide whether Liberian law, the law of the flag, should be overridden in this case because Ganpat did not argue that the law of India or Singapore differed from that of Liberia.
Conclusion
The district court and the court of appeals seem to have been motivated by different policy concerns. For the district court, the significant contacts to the United States favored the application of U.S. law, particularly given the lack of significant contacts with any other jurisdiction. For the court of appeals, uniformity of decision was the overriding value, which favored applying the law of the flag. Of course, it also favored the ship’s operator, which is in a position to choose the flag, at least indirectly. As the two decisions indicate, either result can be justified under the Lauritzen–Rhoditis factors, which provide little guidance in cases such as this.