Filed: Aug. 27, 2002
Latest Update: Feb. 21, 2020
Summary: REVISED AUGUST 27, 2002 UNITED STATES COURT OF APPEALS For the Fifth Circuit No. 02-40317 ALISTAIR J. MACPHAIL, Plaintiff-Appellee, VERSUS OCEANEERING INTERNATIONAL, INC., Defendant-Appellant. Appeal from the United States District Court For the Southern District of Texas August 7, 2002 Before DAVIS, DeMOSS, and STEWART, Circuit Judges. DeMOSS, Circuit Judge: This is an appeal from an action brought by Alistair MacPhail (MacPhail) as an admiralty and maritime law claim against Oceaneering Intern
Summary: REVISED AUGUST 27, 2002 UNITED STATES COURT OF APPEALS For the Fifth Circuit No. 02-40317 ALISTAIR J. MACPHAIL, Plaintiff-Appellee, VERSUS OCEANEERING INTERNATIONAL, INC., Defendant-Appellant. Appeal from the United States District Court For the Southern District of Texas August 7, 2002 Before DAVIS, DeMOSS, and STEWART, Circuit Judges. DeMOSS, Circuit Judge: This is an appeal from an action brought by Alistair MacPhail (MacPhail) as an admiralty and maritime law claim against Oceaneering Interna..
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REVISED AUGUST 27, 2002
UNITED STATES COURT OF APPEALS
For the Fifth Circuit
No. 02-40317
ALISTAIR J. MACPHAIL,
Plaintiff-Appellee,
VERSUS
OCEANEERING INTERNATIONAL, INC.,
Defendant-Appellant.
Appeal from the United States District Court
For the Southern District of Texas
August 7, 2002
Before DAVIS, DeMOSS, and STEWART, Circuit Judges.
DeMOSS, Circuit Judge:
This is an appeal from an action brought by Alistair MacPhail
(MacPhail) as an admiralty and maritime law claim against
Oceaneering International, Inc. (Oceaneering) in the United States
District Court for the Southern District of Texas. Specifically,
this appeal concerns the validity of contractual forum selection
clause and an injunction preventing Oceaneering from further
prosecuting any action against MacPhail in Australia.
Oceaneering presents two issues on appeal: (1) whether the
district court abused its discretion when it enjoined Oceaneering
from prosecuting its contract claims against MacPhail in Australia;
and (2) whether the district court erred when it denied
Oceaneering’s Motion to Dismiss.
BACKGROUND
In May of 1998, MacPhail was working as a diver for
Oceaneering onboard a dive support vessel, which was operating in
the South China Sea off the Coast of China. MacPhail was employed
to perform saturation diving, which required him to be “stored” at
a depth of approximately 100 feet for a 30-day period.1 While
saturation diving, MacPhail breathed a mixture of helium and oxygen
and undertook approximately fifteen “bell runs” in which he
descended to a work area on the seabed in a diving bell, exited the
bell for several hours and then returned in the bell to the vessel.
On the second bell dive, MacPhail observed oil, mud, and
sludge coating the hoses and the inside of the bell. MacPhail
1
Saturation diving is based on the principle that at certain
depths and after certain amounts of time have passed, the amount of
time it takes to decompress is the same. This is the diver’s
saturation point. Therefore, divers are placed in a tank, which
places the divers under pressure and maintains them at this level
of pressure to avoid decompression sickness or “the bends.” The
divers can then be lowered to the ocean floor through a diving bell
and brought back up to the tank, with no ill effects due to
decompression sickness.
2
experienced severe headaches, loss of concentration, and decreased
coordination. After the bell returned to the vessel, MacPhail
reported his problems to surface management and the interior of the
bell was cleaned by the deck crew. MacPhail continued to make his
scheduled dives to the bottom but experienced headaches, loss of
appetite, nausea, vomiting, and other medical problems. Later
analysis of the seabed indicated the mud on the bottom contained
toxic levels of arsenic, mercury, cyanide, hydrogen sulfide, and
polychlorinated biphenyls.
At the end of his 30-day diving period, MacPhail was brought
to the surface and released from the saturation tank. MacPhail was
weak, disoriented, and needed medical attention. MacPhail was
transported to Hong Kong, where he received one day of medical
treatment. He was then transported to Singapore for additional
treatment, after which he was returned to Australia, where he
resided.2 MacPhail saw additional doctors in Australia that were
provided by Oceaneering. Over the next several months, MacPhail
continued to suffer from numerous complications including sleep
loss, depression, fainting spells, and headaches. During this
time, MacPhail requested that experts in hyperbaric medicine and
toxicology examine him. However, Oceaneering told MacPhail it was
looking for, but was unable to locate appropriate specialists.
2
MacPhail's Original Complaint below notes that he is “a resident
and citizen of Australia.”
3
Eventually, MacPhail was told nothing more medically could be
done for him; and the parties negotiated an agreed settlement.
Despite being advised by Oceaneering to obtain legal counsel,
MacPhail chose not to be represented by counsel during the
negotiations and when he signed the Deed of Release and Discharge
(“Release”).3 The Release provided: “This Deed of Release and
Discharge will be governed by and construed in accordance with the
laws of Western Australia.” In addition, the Release included a
forum selection clause:
In the event of any dispute in respect of or
arising from this Deed of Release and Discharge or
any matter relating thereto the parties hereby
agree to submit their dispute to the exclusive
jurisdiction of the District or Supreme Court of
Western Australia, or to the Federal Court of
Australia and the parties hereby agree to submit to
the exclusive jurisdiction of the said Courts.
In consideration of the Release, MacPhail received $280,000;
Oceaneering's commitment to provide him with additional training
courses; and a $25,000 escrow fund to cover future medical
expenses.4 Additionally, on November 5, 1999, MacPhail filed suit
against Oceaneering in the District Court of Western Australia,
Perth; and that court entered final judgment based on the Consent
3
In a letter dated November 2, 1999, Oceaneering’s counsel
advised MacPhail of the proposed settlement agreement and advised,
“[w]e would recommend that you obtain legal advice as soon as
possible . . . [c]ould you kindly notify us in writing when you
have considered the documents and obtained legal advice on the
same.”
4
The $25,000 escrow account has since been exhausted.
4
Order between MacPhail and Oceaneering.5
In November 2000, MacPhail traveled to the United States for
treatment and was diagnosed with various physical abnormalities,
including brain and nerve damage, all linked to toxic chemical
exposure and decompression sickness. As a result, in September of
2001, MacPhail filed this lawsuit against Oceaneering in the
Southern District of Texas, invoking the court's admiralty
jurisdiction and claiming seaman status under 46 U.S.C. § 688.
Oceaneering filed a Motion to Dismiss based on the Release and its
forum selection clause.
On October 17, 2001, the district court issued an Order
Denying Oceaneering’s Motion to Dismiss. The district court
concluded that the forum selection clause in the Release was
“unreasonable and therefore unenforceable because its enforcement
would violate a strong public policy and because Plaintiff would
thereby be deprived of his day in court.”
On January 9, 2002, Oceaneering filed a Writ of Summons in the
Supreme Court of Western Australia seeking to enforce specific
5
Under Section 9(1)(a) of Australia’s Admiralty Act of 1998,
Federal Courts, the courts of the Territories and State courts have
jurisdiction over in personam maritime claims. Under Sections
4(3)(c) and (d), such maritime actions include claims for personal
injury sustained as a consequence of a defect in a ship or arising
out of an act or omission of the owner of the ship, or a person in
possession or control of a ship, or a person for whose wrongful
acts or omissions the owner of the ship is liable. See DAMIEN J.
CREMEAN, ADMIRALTY JURISDICTION: LAW AND PRACTICE IN AUSTRALIA 37-42 (The
Federation Press 1997) (discussing Sections 4(3)(c) and (d) of the
Admiralty Act of 1988).
5
performance of the Release. The Writ commanded MacPhail to make an
appearance in the Australian forum within 10 days. MacPhail,
however, was scheduled to travel to the United States in mid-
January for further treatment and independent medical examinations.
As a result, MacPhail filed a Motion to Enjoin his admiralty suit
in the Southern District of Texas. In his motion, MacPhail argued
that Oceaneering filed the Australian lawsuit to effectively
circumscribe the Southern District of Texas’ jurisdiction and to
interfere with MacPhail’s medical treatment. Oceaneering filed a
Motion in Opposition and asked the district court to reconsider its
previous Order denying Oceaneering's Motion to Dismiss. On
February 11, 2002, the district court issued an order granting
MacPhail's Motion to Enjoin and denied Oceaneering's Motion for
Reconsideration. Oceaneering appeals from that order.
DISCUSSION
Issue I: Whether the district court erred when it enjoined
Oceaneering from prosecuting its contract claims against
MacPhail in Australia.
A. Standard of Review
We review the district court's decision to grant injunctive
relief for abuse of discretion. Kaepa, Inc. v. Achilles Corp., 76
F.3d 624, 626 (5th Cir. 1996). Under this standard, “findings of
fact are upheld unless clearly erroneous, whereas legal conclusions
are subject to broad review and will be reversed if incorrect.”
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Id. (internal quotations omitted).
B. Analysis
Two factors are relevant to our comity analysis as we evaluate
the district court’s granting of MacPhail’s Motion to Enjoin
Oceaneering from prosecuting its action for specific performance in
the Supreme Court of Western Australia: whether the foreign
litigation is duplicitous and vexatious litigation; and whether the
injunction is necessary to protect the court’s jurisdiction. See
id. at 627.
Oceaneering’s instituting an enforcement action in Australia
is not duplicitous or vexatious. The two suits are not
duplicitous. The suit filed by MacPhail in the Southern District
of Texas, although arising out of facts contemplated in the
Release, is a maritime tort claim alleging substantial injuries.
The Australian lawsuit filed by Oceaneering seeks specific
performance of the settlement agreement that the Australian court
had already approved. Furthermore, Oceaneering's Australian
lawsuit is not vexatious. If the District Court of Australia had
proper jurisdiction to rule on the validity of the Release, as it
already had, it is hard to imagine how seeking enforcement of that
ruling would be vexatious.
We reject MacPhail’s argument that the district court had to
issue the injunction to protect its jurisdiction. Whether or not
the District Court for the Southern District of Texas has
7
jurisdiction of this case is a function of whether or not the
Australian court had jurisdiction of the suit filed by MacPhail to
secure that court’s approval of his original settlement agreement
and release with Oceaneering. The District Court of Western
Australia established prima facie jurisdiction when it approved the
Release and the settlement between Oceaneering and MacPhail long
before the Southern District of Texas enjoined Oceaneering from
proceeding with its lawsuit in Australia. Furthermore, nothing in
the record suggests MacPhail will be barred from arguing the
validity of the Release and the forum selection clause in the
Australian forum. Accordingly, we find that the district court
abused its discretion when it enjoined Oceaneering; and we VACATE
the district court’s order granting MacPhail’s Motion to Enjoin and
denying Oceaneering’s Motion for Reconsideration.
Issue II: Whether the district court erred when it denied
Oceaneering’s Motion to Dismiss MacPhail’s suit in
contravention of the forum selection clause.
A. Standard of Review
The enforcement of a forum selection clause is an issue of
law, and we review the district court's conclusions of law de novo.
Afram Carriers, Inc. v. Moeykens, 145 F.3d 298, 301 (5th Cir.
1998). Further, we review de novo a district court's determination
that a contract clause is unenforceable based on public policy
grounds. Fidelity & Deposit Co. v. Connor,
973 F.2d 1236, 1241
(5th Cir. 1992). This Court has held, however, that federal courts
8
must presumptively uphold forum selection clauses in international
transactions. Haynesworth v. Corporation, 121 F.3d 956, 962 (5th
Cir. 1997). Therefore, we review the district court's denial of
Oceaneering's Motion to Dismiss de novo.
B. Analysis
For some of the same reasons stated above in Issue I, we
conclude the district court’s order denying Oceaneering’s Motion to
Dismiss must be vacated. However, given the posture of this case,
we REMAND this proceeding to the Southern District of Texas with
instructions to hold this case in abeyance pending a judgment by
the Supreme Court of Western Australia concerning the negotiated
settlement. If the Australian court grants Oceaneering’s suit to
enforce the prior settlement agreement made in that court, then the
district court will dismiss this admiralty proceeding with
prejudice. If the Australian court sets aside the settlement
agreement for any reason, then the district court will restore this
case to its active docket and determine whether it has jurisdiction
over MacPhail’s claims under the theories asserted in his petition.
CONCLUSION
Having carefully reviewed the record in this case and the
parties’ briefing and for the above reasons, we conclude the
district court abused its discretion when it enjoined Oceaneering
from pursuing its action for specific performance in the Supreme
9
Court of Western Australia. We VACATE the district court’s order
granting MacPhail’s Motion to Enjoin and Oceaneering’s Motion for
Reconsideration. Further, we STAY the district court proceedings
pending judgment by the Australian court. We REMAND this case to
the district court for proceedings consistent with this opinion.
VACATED in part, STAYED, and REMANDED.
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