Saudi v. Northrop Grumman Corp , 427 F.3d 271 ( 2005 )

PUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
CAPTAIN SHERIFF SAUDI, 
Plaintiff-Appellant,
v.
NORTHROP GRUMMAN CORPORATION;
NEWPORT NEWS SHIPBUILDING,  No. 04-2444
INCORPORATED; KEPPEL GROUP
CORPORATION, d/b/a Keppel Offshore
& Marine, Limited, d/b/a Keppel
Shipyard (Pte), Ltd.,
Defendants-Appellees.

Appeal from the United States District Court
for the Eastern District of Virginia, at Norfolk.
Henry Coke Morgan, Jr., Senior District Judge.
(CA-03-299-2)
Argued: September 20, 2005
Decided: October 26, 2005
Before WILKINSON and WILLIAMS, Circuit Judges,
and HAMILTON, Senior Circuit Judge.
Affirmed by published opinion. Judge Wilkinson wrote the opinion,
in which Judge Williams and Senior Judge Hamilton joined.
COUNSEL
ARGUED: Joe Alfred Izen, Jr., Bellaire, Texas, for Appellant. Roy
Grant Decker, Jr., MILES & STOCKBRIDGE, McLean, Virginia;
2 SAUDI v. NORTHROP GRUMMAN CORP.
John Morgan Ryan, VENDEVENTER BLACK, L.L.P., Norfolk, Vir-
ginia, for Appellees. ON BRIEF: William L. Stauffer, Jr., MILES &
STOCKBRIDGE, McLean, Virginia, for Appellees Northrop Grum-
man Corporation and Newport News Shipbuilding, Incorporated;
Katharina K. Brekke, VANDEVENTER BLACK, L.L.P., Norfolk,
Virginia, for Appellee Keppel Group Corporation, dba Keppel Off-
shore & Marine, Limited, dba Keppel Shipyard (Pte), Ltd.
OPINION
WILKINSON, Circuit Judge:
Captain Sheriff Saudi brings this admiralty action seeking recovery
for a personal injury on the high seas. Saudi’s suit against the Keppel
Group Corporation was dismissed for lack of personal jurisdiction.
His suit against Newport News Shipbuilding and Drydock Company
and the Northrop Grumman Corporation proceeded to a bench trial,
at the conclusion of which the district court granted judgment as a
matter of law to the defendants. On appeal, Captain Saudi raises a
host of jurisdictional and trial management issues.
We hold that Federal Rule of Civil Procedure 4(k)(2) cannot be
used to obtain personal jurisdiction over a foreign corporation where,
as here, the foreign corporation’s contacts with the United States fail
to establish any proper basis for specific or general jurisdiction. With
respect to the various trial management issues raised by Captain
Saudi, we hold that far from abusing its discretion, the district court
exercised commendable restraint. Litigants who fail to comply with
court scheduling and discovery orders should not expect courts of
appeal to save them from the consequences of their own delinquence.
I.
On May 17, 1999, Captain Sheriff Saudi was injured when a port-
side hose crane affixed to the vessel S/T Marine Atlantic collapsed as
it was transferring him in a basket to another ship. Captain Saudi fell
approximately fifty feet into the Gulf of Mexico. He claims that he
suffered injuries when the crane’s mechanical arm, or jib, detached
from the crane and landed on him.
SAUDI v. NORTHROP GRUMMAN CORP. 3
In this case, Captain Saudi brings suit against Keppel, Newport
News Shipbuilding, and Northrop Grumman, alleging negligence,
products liability, and breach of an implied warranty of merchanta-
bility.1 In 1979, Newport News Shipbuilding constructed the S/T
Marine Atlantic and attached the crane to the vessel. Northrop Grum-
man is the parent company of Newport News Shipbuilding. In 1994,
Keppel, a Singapore shipyard, refurbished the S/T Marine Atlantic
and crane in Singapore.
The district court dismissed the suit against Keppel for lack of per-
sonal jurisdiction and in a ruling from the bench also refused to trans-
fer venue to Texas. The suit against Newport News Shipbuilding and
Northrop Grumman went to trial in October 12-13, 2004. At trial, the
district court excluded two of Captain Saudi’s design experts after
concluding that he had violated a court order limiting his use of expert
witnesses. This order had been put in place as a penalty for Captain
Saudi’s earlier failure to provide expert witness disclosures, as
required by Federal Rule of Civil Procedure 26(a)(2)(B). At trial, the
district court also denied as untimely Captain Saudi’s request to sub-
poena two adverse witnesses. At the conclusion of the trial, it granted
the defendants’ motion for judgment as a matter of law on partial
findings pursuant to Rule 52(c).
II.
We first address Captain Saudi’s claims pertaining to Keppel. The
district court’s determination that it lacked personal jurisdiction over
Keppel is reviewed de novo, but factual findings supporting a juris-
dictional decision are reviewed for clear error. New Wellington Fin.
Corp. v. Flagship Resort Dev. Corp., 416 F.3d 290, 294 (4th Cir.
2005). The district court’s denial of Captain Saudi’s motion to trans-
fer venue is reviewed for abuse of discretion. See Nichols v. G.D.
1
Captain Saudi has been no stranger to the federal courts. He has
brought various unsuccessful suits arising out of this injury in several
jurisdictions. See Saudi v. Acomarit Mars. Servs., S.A., 114 Fed. App.
449 (3d Cir. 2004), cert. denied, 125 S. Ct. 1850 (2005); Saudi v. Ship
Switzerland, 93 Fed. App. 519 (4th Cir. 2004); Saudi v. S/T Mar. Atl., 81
Fed. App. 505 (5th Cir. 2003), cert. denied, 124 S. Ct. 2916 (2004);
Saudi v. Valmet-Appleton, Inc., 219 F.R.D. 128 (E.D. Wisc. 2003).
4 SAUDI v. NORTHROP GRUMMAN CORP.
Searle & Co., 991 F.2d 1195, 1200 (4th Cir. 1993); Coté v. Wadel,
796 F.2d 981, 985 (7th Cir. 1986).
A.
Captain Saudi contends that the district court erred in concluding
that it lacked personal jurisdiction over Keppel. Saudi’s only asserted
basis for jurisdiction is Federal Rule of Civil Procedure 4(k)(2). Rule
4(k)(2) is in essence a federal long-arm statute. United States v. Swiss
Am. Bank, Ltd., 191 F.3d 30, 40 (1st Cir. 1999). It provides:
If the exercise of jurisdiction is consistent with the Constitu-
tion and laws of the United States, serving a summons or fil-
ing a waiver of service is also effective, with respect to
claims arising under federal law, to establish personal juris-
diction over the person of any defendant who is not subject
to the jurisdiction of the courts of general jurisdiction of any
state.
In order to obtain jurisdiction under Rule 4(k)(2), therefore, three
requirements must be met. Base Metal Trading, Ltd. v. OJSC
"Novokuznetsky Aluminum Factory", 283 F.3d 208, 215 (4th Cir.
2002). First, the suit must arise under federal law. Fed. R. Civ. P.
4(k)(2). Second, the defendant must not be subject to personal juris-
diction in any state. Id.; Base Metal Trading, 283 F.3d at 215. Third,
the defendant must have contacts with the United States "consistent
with the Constitution and laws of the United States." Fed. R. Civ. P.
4(k)(2).
We conclude that Keppel is not subject to jurisdiction under Rule
4(k)(2) because Captain Saudi has clearly not satisfied the third part
of this test. New Wellington Fin. Corp., 416 F.3d at 294 (plaintiff
bears the burden of proving personal jurisdiction by a preponderance
of the evidence). In the context of 4(k)(2), the requirement that Kep-
pel’s contacts be "consistent with the Constitution and laws of the
United States" is founded upon the Due Process Clause of the Fifth
Amendment. See Mwani v. Bin Laden, 417 F.3d 1, 11 (D.C. Cir.
2005). This Clause ensures that a defendant has fair warning before
it is subjected to the coercive power of a court. See Burger King
Corp. v. Rudzewicz, 471 U.S. 462, 472 (1985) (discussing the Due
SAUDI v. NORTHROP GRUMMAN CORP. 5
Process Clause of the Fourteenth Amendment). Thus, while Rule
4(k)(2) is designed to facilitate obtaining jurisdiction over foreign
defendants, it does not operate to relax the requirement that the defen-
dant’s contacts with the forum be constitutionally sufficient.
Captain Saudi argues that Keppel is subject to both specific and
general jurisdiction. A court may exercise specific jurisdiction
"[w]hen the cause of action arises out of the defendant’s contacts with
the forum." Base Metal Trading, 283 F.3d at 213. General jurisdiction
is available if Keppel’s contacts with the United States are "‘continu-
ous and systematic.’" Id. (quoting Helicopteros Nacionales de Colom-
bia, S.A. v. Hall, 466 U.S. 408, 416 (1984)).
Captain Saudi alleges jurisdictional contacts with New Jersey and
Texas. First, he maintains that Marine Transport Lines (MTL), a New
Jersey corporation, and its Chief Engineer, Richard Farman, oversaw
the refurbishment of the S/T Marine Atlantic in Keppel’s Singapore
shipyard in 1994. Specifically, he contends that Mr. Farman super-
vised the refurbishment from New Jersey, that MTL representatives
directly observed Keppel’s work in Singapore, and that MTL person-
nel handled the payment for Keppel’s services on behalf of the ship’s
owner. Captain Saudi also contends that Keppel and MTL were
involved in a joint venture. Second, he notes that Keppel owns a sub-
sidiary shipyard in Brownsville, Texas.
It is clear that the district court did not have specific jurisdiction
over Keppel. To the extent that Keppel has purposefully availed itself
of the United States with its New Jersey and Texas contacts, it is cer-
tainly not the case that "the plaintiff[’s] claims arise out of those
activities directed at the [United States]." New Wellington Fin. Corp.,
416 F.3d at 295. Captain Saudi’s cause of action arises from Keppel’s
alleged misconduct either in Singapore or on the high seas. Captain
Saudi identifies no tortious conduct by Keppel in New Jersey and
these New Jersey contacts therefore do not "provide the basis for the
suit." Carefirst of Md., Inc. v. Carefirst Pregnancy Ctrs., Inc., 334
F.3d 390, 397 (4th Cir. 2003). Nor does Keppel’s Texas shipyard pro-
vide any foundation for specific jurisdiction. Captain Saudi has pro-
vided no evidence that this shipyard had anything to do with his
injuries or the reconstruction of the S/T Marine Atlantic.
6 SAUDI v. NORTHROP GRUMMAN CORP.
The district court also lacked general jurisdiction because on the
record before it Keppel’s contacts with the United States are not "con-
tinuous and systematic." "[T]he threshold level of minimum contacts
sufficient to confer general jurisdiction is significantly higher than for
specific jurisdiction." ALS Scan, Inc. v. Digital Serv. Consultants,
Inc., 293 F.3d 707, 715 (4th Cir. 2002) (internal quotation marks
omitted). Captain Saudi provides virtually no evidence that Keppel
maintains a continuous presence in the United States, and instead
offers only isolated contacts with Texas and New Jersey. Contrary to
Captain Saudi’s assertions, there is nothing to suggest that Keppel and
MTL were part of a joint venture. MTL hired Keppel to reconstruct
the vessel, and MTL monitored Keppel’s work. Surely evidence of a
single, short-term contractual relationship does not rise to the level of
"continuous and systematic" contact. See Nichols, 991 F.2d at 1200
(single contract insufficient to generate general jurisdiction, even in
combination with a series of other contacts). Nor can Keppel’s Texas
shipyard provide the basis for general jurisdiction, because it is gener-
ally the case that the contacts of a corporate subsidiary cannot impute
jurisdiction to its parent entity. Purdue Research Found. v. Sanofi-
Synthelabo, S.A., 338 F.3d 773, 788 n.17 (7th Cir. 2003); Dickson
Mar. Inc. v. Panalpina, Inc., 179 F.3d 331, 338 (5th Cir. 1999); see
also Mylan Labs., Inc. v. Akzo, N.V., 2 F.3d 56, 61-62 (4th Cir. 1993).
Captain Saudi has provided no evidence of the nature of the relation-
ship between Keppel and its Texas subsidiary that would justify an
exception to this general rule. See Mylan Labs., 2 F.3d at 61 (noting
various factors, such as significant degree of control, that may rebut
the general rule).2
2
Captain Saudi also contends that the district court erred in refusing to
impose discovery sanctions on Keppel for failure to properly respond to
interrogatories querying its jurisdictional contacts. The district court did
not abuse its discretion. Lone Star Steakhouse & Saloon, Inc. v. Alpha
of Va., Inc., 43 F.3d 922, 929 (4th Cir. 1995). The district court deter-
mined that Keppel had not made false or misleading statements, and that
its answers to Saudi’s interrogatories complied with Federal Rule of
Civil Procedure 33. It also held that Captain Saudi had not attempted to
confer with Keppel after determining that certain answers were allegedly
incomplete, as required by Rule 37(a)(2)(B).
SAUDI v. NORTHROP GRUMMAN CORP. 7
B.
Captain Saudi next challenges the district court’s refusal to transfer
venue to Texas pursuant to 28 U.S.C. § 1406(a) (2000). Under
§ 1406(a), "[t]he district court of a district in which is filed a case lay-
ing venue in the wrong division or district shall dismiss, or if it be in
the interest of justice, transfer such a case to any district or division
in which it could have been brought." Section 1406(a) has been con-
strued to permit transfers where personal jurisdiction is lacking in the
transferor court, but would be available in an alternative forum. See
In re Carefirst of Maryland, Inc., 305 F.3d 253, 255-56 (4th Cir.
2002). According to Saudi, a transfer was warranted here because
Keppel may be subject to personal jurisdiction in Texas and the stat-
ute of limitations would expire if this case were dismissed and he
were forced to refile.
We find this contention unpersuasive, because Captain Saudi has
never shown that suit against Keppel "could have been brought" in
Texas. 28 U.S.C. § 1406(a); see also City of Va. Beach v. Roanoke
River Basin Ass’n, 776 F.2d 484, 489 (4th Cir. 1985) ("Transfer, of
course, can be made only to a district where the action could have
been brought."). As we concluded above, on the record before us
Keppel’s contacts with Texas and the United States as a whole are
constitutionally insufficient to serve as the basis for either specific or
general jurisdiction. Captain Saudi cites no authority for the proposi-
tion that a suit must be transferred upon a mere assertion of potential
jurisdiction that has been foreclosed by the record before the trans-
feror court. Captain Saudi also never filed a motion to transfer and
only raised the issue at a hearing, after the district court determined
that it lacked Rule 4(k)(2) jurisdiction over Keppel. We have recog-
nized that "the interest of justice" standard provides district courts
with broad discretion in denying a request for a transfer. See, e.g.,
Nichols, 991 F.2d at 1200-01 (wide discretion to deny transfer where
attorney "could reasonably have foreseen" that he filed suit in an
improper forum). The district court did not abuse its discretion here.
III.
We next address Captain Saudi’s claims relating to Newport News
Shipbuilding and Northrop Grumman. The district court’s decision to
8 SAUDI v. NORTHROP GRUMMAN CORP.
exclude two of Captain Saudi’s expert witnesses is reviewed for abuse
of discretion. S. States Rack & Fixture, Inc. v. Sherwin-Williams Co.,
318 F.3d 592, 595 (4th Cir. 2003). Its denial of Captain Saudi’s
request to subpoena adverse witnesses is also reviewed under this
same standard. See Adkins v. Kaspar, 393 F.3d 559, 571 (5th Cir.
2004).
It must be noted at the outset that Captain Saudi’s actions in this
litigation presented particular challenges for the district court. The
record is replete with instances when Captain Saudi failed to abide by
the district court’s rules, including missing deadlines, filing briefs on
the day of hearings, and seeking the assistance of counsel while
claiming to be proceeding pro se. Our consideration of the district
court’s various decisions is guided by the necessary deference owed
to district courts in the context of trial management, and by our view
that the district court was exceedingly patient in this trying situation.
A.
Captain Saudi contends that the district court erred in excluding at
trial two of his expert witnesses, George Moran and Lee Wyman.
Consideration of this claim requires a fuller exposition of the course
of litigation in this case. Captain Saudi provided a Designation of
Expert Witnesses on June 10, 2004, listing thirty names. He did not,
however, timely file Rule 26(a)(2)(B) expert witness disclosures, as
required by the district court’s Scheduling Order. Rule 26(a)(2)(B)
reports include, among other things, the expert’s opinions and basis
therefor, his qualifications, and any past experience as an expert wit-
ness. In an August 5 order, the district court determined that as a
sanction for failing to timely file Rule 26 disclosures, Captain Saudi
"shall identify no more than three (3) expert witnesses" in the field
of defective design. It also granted him an additional week to provide
the Rule 26 expert witness reports. Two of the experts Saudi eventu-
ally selected, Moran and Wyman, were not among the original thirty
experts he had listed in his June 10 Designation of Expert Witnesses.
At the October trial, the defendants asked that Moran and Wyman
be struck because Captain Saudi had violated the district court’s order
by selecting two experts from outside the original thirty in the Desig-
nation. By this time, the defendants had received the Rule 26 disclo-
SAUDI v. NORTHROP GRUMMAN CORP. 9
sures for Moran and Wyman and had deposed both of them. The
district court agreed with the defendants that the two experts should
be excluded. It reasoned that it could have struck all of Captain
Saudi’s experts as a sanction for his failure to timely file Rule 26
reports, but had instead decided to limit him to three experts and grant
him additional time. By selecting two experts not among the thirty
included in the Designation, Captain Saudi had violated the court’s
order.
Captain Saudi contends that this was an abuse of discretion. He
argues that when the district court limited him to three design experts,
it did not also require that he select those experts from among the
thirty listed in the original Designation. Specifically, he notes that the
defendants raised this issue at a pretrial conference and the district
court declined to decide the issue at that time. He also points to state-
ments that the district court made at this pretrial conference and at
trial that together suggest the court was uncertain whether Saudi was
in fact limited to the thirty experts in his Designation.
Rule 37(c)(1) provides that "[a] party that without substantial justi-
fication fails to disclose information required by Rule 26(a) . . . is not,
unless such failure is harmless, permitted to use as evidence at trial
. . . any witness or information not so disclosed." A district court may
also impose "other appropriate sanctions." Id. Rule 26 disclosures are
often the centerpiece of discovery in litigation that uses expert wit-
nesses. A party that fails to provide these disclosures unfairly inhibits
its opponent’s ability to properly prepare, unnecessarily prolongs liti-
gation, and undermines the district court’s management of the case.
For this reason, "[w]e give particularly wide latitude to the district
court’s discretion to issue sanctions under Rule 37(c)(1)." S. States
Rack & Fixture, 318 F.3d at 595 (internal quotation marks omitted).
This latitude is particularly appropriate here. The district court con-
cluded that Captain Saudi had violated its August 5 order by selecting
two witnesses not among the original thirty, and a district court’s
interpretation of its own order is entitled to deference. Anderson v.
Stephens, 875 F.2d 76, 80 n.8 (4th Cir. 1989). To the extent the order
is ambiguous, an examination of the record indicates that the district
court intended to limit Captain Saudi to his initial Designation. See
In re Tomlin, 105 F.3d 933, 940 (4th Cir. 1997) ("When an order is
ambiguous, a court must construe its meaning, and in so doing may
10 SAUDI v. NORTHROP GRUMMAN CORP.
resort to the record upon which the judgment was based.") (internal
quotation marks omitted). By limiting him to three expert witnesses
only, the district court was attempting to cabin Captain Saudi’s use
of witnesses and place reasonable limits on this freewheeling litiga-
tion. Allowing Saudi to select from outside of the initial list would
have achieved precisely the opposite result.
We hasten to add that as the district court recognized, it could have
struck at the outset all of Captain Saudi’s expert witnesses as a sanc-
tion for his failure to timely file Rule 26 disclosures. This was the
course pursued by the district courts in Captain Saudi’s Wisconsin
and Texas suits, when Captain Saudi similarly did not comply with
Rule 26. See Saudi v. Valmet-Appleton, Inc., 219 F.R.D. 128, 134
(E.D. Wisc. 2003); Saudi v. S/T Mar. Atl., 2000 WL 33993435 *4
(S.D. Tex. 2000). In this case, the district court generously granted
Saudi additional time to file disclosures on three design experts.
Saudi’s current contention — that the district court order limiting him
to three expert witnesses did not require him to select those witnesses
from his original Designation — is only an issue because Captain
Saudi failed to file Rule 26 disclosures and received initially a lenient
response. The district court should not be a victim of its own lenity,
nor should Captain Saudi capitalize on his noncompliance with the
court’s rules.
B.
Captain Saudi lastly argues that the district court abused its discre-
tion by denying as untimely his request to subpoena adverse wit-
nesses. Captain Saudi sought these subpoenas during the trial, seeking
to have the witnesses appear the next day. This was in clear violation
of a local rule that requires service of subpoenas no less than fourteen
days before trial. See E.D. Va. Local Civ. R. 45(E). The district court
had also previously imposed limits on Captain Saudi’s ability to
obtain subpoenas after determining that he had used subpoenas to har-
rass defendants’ corporate officers. In light of these facts, the district
court did not abuse its discretion.
IV.
For the foregoing reasons, the judgment of the district court is
AFFIRMED.