Saudi v. v. Ship Switzerland, S.A. , 93 F. App'x 516 ( 2004 )

UNPUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
SHERIFF SAUDI, 
Plaintiff-Appellant,
v.
V. SHIP SWITZERLAND, S.A., formerly  No. 03-1307
known as Acomarit Services
Maritimes, S.A.; AMERICAN
AUTOMAR, INCORPORATED,
Defendants-Appellees.

Appeal from the United States District Court
for the District of Maryland, at Greenbelt.
Alexander Williams, Jr., District Judge.
(CA-02-1722-AW)
Argued: January 21, 2004
Decided: March 31, 2004
Before WIDENER, LUTTIG, and WILLIAMS Circuit Judges.
Affirmed by unpublished per curiam opinion.
COUNSEL
ARGUED: Joe Alfred Izen, Jr., Bellaire, Texas, for Appellant.
Thomas R. Nork, BELL, RYNIKER, LETOURNEAU & NORK,
P.C., Houston, Texas, for Appellees. ON BRIEF: Keith B. Letour-
neau, BELL, RYNIKER, LETOURNEAU & NORK, P.C., Houston,
Texas, for Appellees.
2 SAUDI v. V. SHIP SWITZERLAND
Unpublished opinions are not binding precedent in this circuit. See
Local Rule 36(c).
OPINION
PER CURIAM:
After suffering injuries in an accident on the high seas, appellant,
Captain Sheriff Saudi, brought this admiralty action in the United
States District Court for the District of Maryland against appellees V.
Ship Switzerland, S.A., formerly known as Acomarit Services Mari-
times S.A. (Acomarit), and American Automar, Inc. (Automar), rais-
ing claims of negligence and premises liability. The district court
granted Acomarit’s motion to dismiss for lack of personal jurisdiction
and also granted Automar’s motion for summary judgment. For the
reasons that follow, we affirm.
I.
Since the accident that gives rise to this litigation occurred, Captain
Saudi has brought suit in no fewer than five jurisdictions to recover
for his injuries. See Saudi v. Acomarit Maritimes Services, S.A., 245
F. Supp. 2d 662 (E.D. Pa. 2003) (maritime negligence action); Saudi
v. Northrop Grumman Corp., 273 F. Supp. 2d 101 (D.D.C. 2003)
(products liability action); Saudi v. Valmet-Appleton, Inc., 219 F.R.D.
128 (E.D. Wis. 2003) (products liability action); Saudi v. S/T Marine
Atlantic, 2001 WL 893871 (S.D. Tex. Feb. 20, 2001) (maritime negli-
gence action).
In his complaint before the district court in this case, Captain Saudi
alleges that he was injured on May 17, 1999, when a crane, which
was offloading Saudi in a basket from the S/T Marine Atlantic, a
large crude oil tanker moored in the Gulf of Mexico, collapsed onto
a tender vessel floating nearby. As a result, Captain Saudi was
dropped approximately fifty feet into the Gulf of Mexico. Though
Captain Saudi managed to leap clear of the basket, he claims that the
wire support cable of the jib of the collapsed crane lashed him as he
fell, and that he suffered extensive injuries.
SAUDI v. V. SHIP SWITZERLAND 3
According to Captain Saudi, Acomarit, a Swiss ship management
corporation headquartered in Geneva, managed the Marine Atlantic
for at least three years prior to the date of his accident, and Automar,
a Maryland corporation headquartered in Bethesda, controlled the
premises of the Marine Atlantic jointly with Acomarit. J.A. 7, 9. He
also claims that Acomarit maintained a port captain, Thomas Garrett,
who at some point came aboard the Marine Atlantic and inspected the
very crane which collapsed to cause the accident. And he further
asserts that Automar exercised control over Garrett’s actions, jointly
with Acomarit, through Garrett’s nominal employer Osprey Acomarit
Ship Management, Inc. (Osprey), in which Automar and Acomarit
were formerly both shareholders but which has been a wholly-owned
subsidiary of Automar since December 1998. J.A. 6-7, 289.
Captain Saudi contends that because Garrett’s inspection failed to
uncover the defects which would later cause the crane to collapse, and
because appellees’ maintenance of the Marine Atlantic obviously did
not prevent the collapse from occurring, appellees breached their
"duty to inspect and/or maintain the crane in question and to keep it
in proper condition for ordinary use." J.A. 7. For the injuries he has
suffered, Captain Saudi claims he is entitled to an award of two mil-
lion dollars in actual damages, and no less than ten million dollars in
punitive damages. J.A. 10.
Ruling from the bench after a hearing, the district court granted
Acomarit’s motion to dismiss for lack of personal jurisdiction and
also granted Automar’s motion for summary judgment. J.A. 433-51.
Captain Saudi then timely appealed.
II.
Captain Saudi asserts first that the district court erred in granting
Acomarit’s motion to dismiss for lack of personal jurisdiction. In
explaining its grant of Acomarit’s motion to dismiss, the district court
stated the following:
[T]here’s nothing in this record that has been presented to
this Court that would show that [Acomarit] has availed itself
to the personal jurisdiction of this Court, not generally nor
specifically.
4 SAUDI v. V. SHIP SWITZERLAND
They don’t do business here. They’re not registered to con-
duct business here. There’s no agent for service of process
here. They have not purchased or sold any goods here. They
have not advertised any services or goods in any medium
that I know of in Maryland. They don’t own or lease any
property in Maryland. They have never solicited any busi-
ness in Maryland. There simply is no what we call continu-
ous or systematic contacts or connections here in Maryland.
This alleged relationship by Mr. Garrett with [Acomarit and
Automar] is just that. It’s an allegation, which is, of course,
disputed by [Acomarit]. But even as argued or articulated
here, it doesn’t give rise or create any connection or contact
with Maryland sufficient to give rise to any personal juris-
diction.
This accident occurred . . . in the Gulf of Mexico, 60 miles
off of Texas, and this defendant, [Acomarit], has no connec-
tion here in Maryland . . . [T]here’s no basis for this federal
court to permit any suit against [Acomarit] to go on. It’s just
not here, no personal jurisdiction. I will grant the motion to
dismiss.
J.A. 438-40. For the reasons stated by the district court, with which
we can find no fault, we affirm the district court’s order dismissing
Captain Saudi’s claims against Acomarit for lack of personal jurisdic-
tion.
III.
Next, Captain Saudi contends that the district court erred in grant-
ing summary judgment to Automar because, in so ruling, the court
relied on a decision adverse to Saudi from the Southern District of
Texas, in a lawsuit previously filed by Saudi against Acomarit and
other defendants including Automar’s now wholly-owned subsidiary
Osprey, which "should not be given collateral estoppel or issue pre-
clusive effect." Appellant’s Reply Br. at 5 (emphases added). Appel-
lees, meanwhile, urge affirmance on the ground that the district court
properly relied on the Texas decision to hold Saudi collaterally estop-
SAUDI v. V. SHIP SWITZERLAND 5
ped from arguing that appellees’ actions were the proximate cause of
Saudi’s injuries. Appellees’ Br. at 13.
By focusing on collateral estoppel, we believe the parties have mis-
understood the district court’s oral ruling, albeit understandably.
In explanation of its order of summary judgment, the district court
stated the following:
[T]he very issue of negligence and carelessness involving
the players and the parties and subsidiaries has been liti-
gated, particularly in the federal court in Texas, and that
judge made a ruling . . . that the conduct and activities by
the parties here did not amount to negligence and . . . was
too attenuated and no real proximate cause in connection
with the injury and the acts and conduct associated with
those parties. . . .
I think the decision [for] the subsidiary [Osprey] is for all
intent and purposes a decision for the parent company
[Automar], the entity that is before this Court now. That’s
how res judicata works. I think I’m bound by that decision
in Texas under those principles of finality.
J.A. 448-49 (emphasis added). In this critical passage, the district
court spoke expressly of "res judicata,"1 and never invoked the phrase
1
The capacious term "res judicata," which is Latin for "a matter
adjudged," Black’s Law Dictionary 1305 (6th ed. 1990), can be used to
refer both to "claim preclusion," under which an earlier action between
parties will bar later actions between the same parties or their privies
with respect to the same occurrence involved in the first action, or to
"issue preclusion" (also known as "collateral estoppel"), under which the
actual determination of a litigated issue in one proceeding will bar the
relitigation of that same issue in a later proceeding by a party which had
a full and fair opportunity to litigate it in the earlier proceeding. See In
re: Microsoft Corp. Antitrust Litigation, 355 F.3d 322, 325-26 (4th Cir.
2004); see generally Hart & Wechsler’s The Federal Courts and the
Federal System 1406-07 (5th ed. 2003). The term "res judicata" is often
used, however, and perhaps most commonly used, in a narrower sense
to denote only "claim preclusion" as distinguished from "issue preclu-
sion." See, e.g., Migra v. Bd. of Educ., 465 U.S. 75, 77 n.1 (1984); In re:
Bridgestone/Firestone, Inc., 333 F.3d 763, 767 (7th Cir. 2003); In re:
Erlewine, 349 F.3d 205, 210 (5th Cir. 2003).
6 SAUDI v. V. SHIP SWITZERLAND
"collateral estoppel" or "issue preclusion." In addition, the court
emphasized the fact that Automar and Osprey were in privity with
each other, a relationship relevant to claim preclusion, and irrelevant
to issue preclusion, compare Grausz v. Englander, 321 F.3d 467, 472
(4th Cir. 2003) (setting forth the elements of claim preclusion), with
Sedlack v. Braswell Serv. Group, Inc., 134 F.3d 219, 224 (4th Cir.
1998) (setting forth the elements of issue preclusion). See J.A. 445 ("I
think that you have some problems with what we call parties and priv-
ities right now."); id. at 449 ("I think the decision against the subsid-
iary is for all intent and purposes a decision for the parent company,
the entity that is before this Court now.").
The court did also reference the fact that the "issue of negligence
and carelessness involving the players and the parties and subsidiaries
has been litigated," a reference which, to be sure, could suggest that
the court intended to rely upon issue preclusion, rather than claim pre-
clusion. We believe, however, that, given the district court’s express
invocation of the term of art "res judicata" and its unequivocal discus-
sion of the privity between Automar and Osprey, the best understand-
ing of the court’s order is that it in fact rests on claim preclusion.
Having said as much, the district court’s reliance on claim preclu-
sion is somewhat problematic under the circumstances. Claim preclu-
sion is an affirmative defense which must be raised by the defendant
in its response or else waived under Federal Rule of Civil Procedure
8(c), see Am. Furniture Co., Inc. v. Int’l Accommodations Supply 721
F.2d 478, 482-83 (5th Cir. 1983), and appellees did not themselves
raise the defense of claim preclusion in their submissions. Thus, the
district court’s invocation of claim preclusion here was sua sponte,
which generally is disfavored. See, e.g., Carbonell v. Louisiana Dept.
of Health & Human Resources, 772 F.2d 185, 189 (5th Cir. 1985)
(observing that a district court may raise claim preclusion sua sponte
only in cases where the previous action was litigated in the same dis-
trict or in cases "in which all relevant data and legal records are
before the court and the demands of comity, continuity in the law, and
essential justice mandate judicial invocation of the principles of res
judicata"). Nonetheless, given the indisputable privity of the parties
and the identity of the issues between the instant case and the case
upon which the res judicata holding rested, we believe that sua sponte
invocation of the bar was permissible.
SAUDI v. V. SHIP SWITZERLAND 7
Turning to the question of whether the district court’s holding of
res judicata was correct, we believe that it was. According to the
claim preclusion principles developed in the case law of this circuit
a later claim is precluded by a prior judgment when (i) the prior judg-
ment was final, on the merits, and rendered by a court of competent
jurisdiction in accordance with due process; (ii) the parties in the two
actions are either identical or in privity; and (iii) the claim in the sec-
ond action is based upon the same cause of action involved in the ear-
lier proceeding. See Grausz, 321 F.3d at 472.
Each of these elements is satisfied here. With respect to the first,
the Texas district court clearly reached a final decision on the merits
when it granted Osprey’s motion for summary judgment against
Saudi on Saudi’s maritime negligence and unseaworthiness claims.
See Saudi v. S/T/ Marine Atlantic, 2001 WL 893871, *6 (S.D. Tex.
Feb. 20, 2001), aff’d, 2003 WL 22838776 (5th Cir. Dec. 1, 2003).
With respect to the second, we have no trouble concluding that Auto-
mar was in privity with its wholly-owned subsidiary Osprey for the
purposes of claim preclusion where, as here, Saudi himself argues that
Osprey is a "mere corporate vehicle" controlled entirely by Automar,
J.A. at 18-19. See Robinson v. Volkswagenwerk AG, 56 F.3d 1268,
1275 (10th Cir. 1995) (holding that adverse party’s own allegations
of a controlling, "near alter ego" relationship between parent and sub-
sidiary were sufficient to establish privity between the two corpora-
tions for the purposes of claim preclusion); see also Whitehead v.
Viacom, 233 F. Supp. 2d 715, 721 (D. Md. 2002) (holding a parent
company and its wholly-owned subsidiary to be in privity for pur-
poses of res judicata); Buckley v. Airshield Corp., 977 F. Supp. 375,
378-79 (D. Md. 1997) (same). And with respect to the third, this case
obviously involves the same cause of action for purposes of claim
preclusion, because both this action and the Texas action arise out of
the same core of operative facts — namely, the accident in which the
defective crane on the Marine Atlantic collapsed, causing Captain
Saudi’s injuries. See Grausz, 321 F.3d at 473; see also Keith v.
Aldridge, 900 F.2d 736, 740 (1990) ("[T]he appropriate inquiry is
whether the new claim arises out of the same transaction or series of
transactions as the claim resolved by the prior judgment.").
Accordingly, the district court did not err in holding that the doc-
trine of claim preclusion barred Saudi from bringing the present
8 SAUDI v. V. SHIP SWITZERLAND
action against Automar. In the words of the district court, "the deci-
sion [for] the subsidiary [Osprey] is for all intent and purposes a deci-
sion for the parent company [Automar]." J.A. 449.
CONCLUSION
For the reasons stated herein, the judgment of the district court is
affirmed.
AFFIRMED