By Madelyn Graves
Introduction
Imagine a Louisiana seaman working aboard a vessel that transports cargo across international waters, constantly traveling between ports of different foreign nations.[1] During his voyage, the seaman becomes gravely ill, leading to months of hospitalization and expensive medical procedures.[2] The seaman files suit against the ship management company in his home state, Louisiana, alleging that the ship manager failed to maintain an adequate supply of medication on the vessel.[3] However, because the vessel regularly changed locations, it remains unclear which nation’s laws will govern the seaman’s claim.[4] For instance, the seaman contracted the disease while docked at the port of one nation, became symptomatic while sailing through the waters of a second nation, and was hospitalized in a third nation. Additionally, the seaman worked on a foreign vessel pursuant to a foreign employment contract, implicating a fourth and fifth nation.
Under the traditional choice of law test, the seaman’s attorney could look to the law of the flag—that is, the nation where the ship is registered—as a reliable indicator.[5] Absent proof that “another nation has a more significant, countervailing interest,” the law of the flag traditionally controlled, ensuring consistent and predictable results in the choice of law analysis.[6] However, in Ganpat v. Eastern Pacific Shipping PTE, Ltd., the Fifth Circuit left uncertainty surrounding the law of the flag’s proper weight when the vessel owner is not a party to the claim.[7] Because of this ambiguity, district courts in the Fifth Circuit may incorrectly discount the importance of the law of the flag based on the defendant’s identity, undermining the goals of consistency and predictability and creating precedent that is unfaithful to the original purpose of the test.[8] Thus, when administering the choice of law test, Fifth Circuit courts should show deference to the law of the flag in all traditional maritime cases, regardless of the defendant’s shipowner status.
I. Background
Since maritime employment is often transient by nature, multiple nations may have a connection to a plaintiff’s maritime tort claim.[9] In Lauritzen v. Larsen and Hellenic Lines, Ltd. v. Rhoditis, the United States Supreme Court articulated an eight-factor test to determine whether U.S. maritime law or foreign law should govern these actions.[10] These factors are: (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; (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.[11] This test is not a quantitative one in which courts simply count the relevant contacts with each nation.[12] Rather, the “significance of each factor must be considered within the particular context of the claim and the national interest that might be served by the application of United States law.”[13] Therefore, each factor’s weight depends on the nature of the maritime activity the plaintiff engaged in.[14]
II. The Choice of Law Test for Traditional vs. Nontraditional Maritime Activity
Specifically, the weight of each factor hinges on whether the plaintiff engaged in “traditional” or “nontraditional” maritime activity, and courts make this distinction based on whether the plaintiff worked aboard a transient or stationary vessel.[15] If the plaintiff worked aboard a seafaring vessel that “regularly transports cargo across international waters between the ports of various sovereign nations,” then the plaintiff engaged in “traditional maritime commerce.”[16] Under these circumstances, courts accord minimal weight to the place of the wrongful act, because of the fortuity of the ship’s location when a shipboard tort occurs.[17] Likewise, courts also discount the significance of the allegiance or domicile of the injured worker and the place of contract in this context.[18] In contrast, the law of the flag is “of cardinal importance” in determining the law applicable to traditional maritime cases.[19] This factor’s deferential treatment is rooted in pragmatism, stability, predictability, and international comity, as “there must be some law on shipboard . . . [and] it cannot change at every change of waters.”[20] For this reason, “the flag that a ship flies may, at times, alone be sufficient” to determine which nation’s law applies.[21] Further, because shipowners may register their ships in countries other than their own and each nation has an interest in governing its citizens’ conduct, the defendant’s allegiance remains another important factor.[22]
In contrast, if the plaintiff participated in offshore oil production on a vessel permanently stationed off a particular country’s coast, then the plaintiff engaged in “nontraditional maritime employment.”[23] Factors that courts deem less important in the traditional shipping context—such as the place of the wrongful act, the allegiance or domicile of the injured, and the place of the contract—gain significance in nontraditional maritime cases.[24] As a result, the law of the flag falls subordinate to these factors, as its purpose becomes less compelling when the plaintiff is permanently stationed in one nation’s waters.[25]
III. The Law of the Flag When the Vessel Owner is Not a Party
Based on the transient nature of traditional maritime activity, courts have always shown great deference to the law of the flag in traditional maritime cases.[26] This factor achieves consistency and predictability in cases where the vessel plies the world’s seas and constantly changes locations.[27] However, some courts have questioned this factor’s weight when the vessel owner is not a defendant, reasoning that the vessel and its place of registration are irrelevant to claims against non-shipowners.[28]
For example, in Rationis Enters. Inc. of Panama v. Hyundai Mipo Dockyard Co., the Second Circuit Court of Appeals noted that it “look[s] to the law of the ship’s flag only if the shipowner is a party.”[29] The court explained:
Whatever significance law of the flag may have in cases where the ship or its owner is a party and where other factors fail to point clearly to another jurisdiction’s law, we see no reason to apply the law of the flag here in preference to that of another jurisdiction whose ties are more pertinent to the dispute, especially given the fact that neither the ship nor the owner is a party.[30]
Likewise, the Fifth Circuit Court of Appeals followed the Second Circuit’s reasoning in Coats v. Penrod Drilling Corp., noting that, because the defendant was not the shipowner, the law of the flag “ha[d] no specific application to it.”[31] Because the Coats plaintiff worked on an offshore drilling rig, this result seemed consistent with Fifth Circuit precedent—as courts generally discount the law of the flag’s importance in nontraditional maritime cases.[32] However, the Fifth Circuit specifically attributed its diminished significance to the fact that the defendant was not the shipowner—not solely because this was a nontraditional maritime case.[33] Notably, the Fifth Circuit failed to clarify whether the law of the flag remained significant in the traditional maritime shipping context when the shipowner was not a party to the claim.[34] As a result, the Fifth Circuit left a gaping hole in courts’ understanding of the Lauritzen-Rhoditis test and the proper weight that they should accord each factor.[35]
IV. The Eastern District Court’s Problematic Holding in Ganpat v. Eastern Pacific Shipping
Without clear instruction from the Fifth Circuit, the Eastern District Court of Louisiana extended the rationale in Coats to a traditional maritime case.[36] In Ganpat v. Eastern Pacific Shipping PTE, Ltd., Kholkar Ganpat, an Indian seaman, contracted malaria while working as a crewmember aboard the M/V STARGATE.[37] Ganpat became symptomatic during the ship’s voyage from Savannah, Georgia to Brazil, where he was hospitalized upon his arrival.[38] Ganpat filed suit against Eastern Pacific Shipping—an international ship management company domiciled in Singapore—alleging that the ship failed to stock the appropriate amount of anti-malaria medicine while docked in Savannah.[39]
While this cause of action implicated several nations, Ganpat’s claim had substantial contacts with Liberia.[40] The M/V STARGATE flew a Liberian flag, a Liberian corporation employed the plaintiff, and his employment contract provided that the law of the ship’s flag governed the agreement.[41] However, when tasked with determining which substantive law applied to Ganpat’s claims, the Eastern District Court unexpectedly held that, under the Lauritzen-Rhoditis test, United States law governed.[42] In its reasoning, the court acknowledged that Ganpat suffered an injury while engaged in traditional maritime activities, and the law of the flag is traditionally “of cardinal importance” in such cases.[43] However, citing Coats, the court declined to consider this factor because Ganpat only filed suit against the ship manager, not the shipowner.[44] Therefore, this factor and other factors involving the vessel owner—such as the base of the shipowners’ operations—had “no specific application” to this case.[45]
After eliminating those two factors, the court explained that the place of injury, allegiance or domicile of the injured, and the place of contract are also insignificant in the traditional maritime context.[46] Consequently, only two factors remained applicable in this case: the allegiance of the defendant and the law of the forum.[47] Because of these limitations, the court drew on other factors beyond the Lauritzen-Rhoditis test, stating that this test was “imbued with a flexibility that permits courts to take account of the context of any incident that American law is alleged to govern.”[48]
As a result of Ganpat, the Eastern District Court essentially created a subcategory of traditional maritime cases where most of the Lauritzen-Rhoditis factors became inapplicable.[49] If the Ganpat decision stood, the district court’s holding would prohibit courts from considering five of the eight factors in traditional maritime cases where the shipowner is not a defendant—effectively unraveling the entire Lauritzen-Rhoditis test.[50] Additionally, in discounting the importance of the law of the flag, the Eastern District Court undermined the test’s fundamental purpose in the traditional maritime context: predictability, consistency, and stability.[51]
V. The Fifth Circuit’s Ambiguous Holding in Ganpat v. Eastern Pacific Shipping
On May 1, 2024, the Fifth Circuit Court of Appeals reversed the district court’s decision, holding that the law of the flag and the shipowner’s base of operations retain some relevance in Ganpat’s case.[52] The court disagreed with the district court’s assertion 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.”[53] Moreover, the court acknowledged the need to establish a “uniform, consistent law onboard a ship that traveled through waters of more than one sovereign nation,” and the law of the flag serves this purpose.[54] However, the Fifth Circuit did not fully revert to the traditional application of the Lauritzen-Rhoditis test, where the law of the flag is of “cardinal importance” in all maritime shipping cases.[55] Rather, the court stated that “in traditional maritime shipping cases brought by an injured crew member against a defendant who is alleged to have acted as the owner of the vessel and to have breached duties generally owed by the shipowner, the law of the flag factor maintains at least some significance.”[56]
Thus, the court notably limited its holding to cases where the defendant “act[s] as the owner of the vessel” and “breach[es] duties generally owed by the shipowner.”[57] Further, the Fifth Circuit stated that the law of the flag only maintains some significance in these cases.[58] Leaving many open questions, the Fifth Circuit failed to specify how much weight courts should give the law of the flag when the shipowner is not a defendant.[59] Additionally, the Fifth Circuit leaves lower courts with no guidance as to the test’s proper application if the defendant did not undertake a vessel owner’s duties.[60] This ambiguity leaves room for lower courts to discount the importance of the law of the flag based on the defendant’s identity, undermining the goals of predictability and consistency.
VI. The Proper Weight of the Law of the Flag in Traditional Maritime Cases
To achieve consistency and avoid uncertainty in the choice of law analysis, the Lauritzen-Rhoditis test should remain the same in all traditional maritime shipping cases—regardless of the defendant’s vessel owner status. The fundamental purpose of the Lauritzen-Rhoditis test 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.”[61] Since its inception, this test found its roots in predictability, necessitated by the transient nature of the plaintiff’s work and the fortuitous location of his or her injuries.[62] These circumstances do not change when the vessel owner is not a defendant, as the transient nature of the plaintiff’s work remains the same.[63]
Moreover, even if the defendant does not own the vessel, the vessel and its country of registration remain relevant to all shipboard tort actions.[64] The connection between the plaintiff’s claim and the vessel does not vanish when the shipowner is out of the picture. Regardless of the defendant’s shipowner status, the vessel is still where the plaintiff worked and where the tortious incident occurred, and it has become well-established that “all things done on board” should be controlled by the laws of the “nation to which the vessel belonged.”[65] Therefore, the law of the flag and its heightened significance remain applicable in all traditional maritime cases.[66]
Conclusion
At the inception of the Lauritzen-Rhoditis test, “overarching concerns of comity, pragmatism and predictability led the Lauritzen Court to declare that ‘the weight given to the ensign overbears most other connecting events in determining applicable law.’”[67] However, the Fifth Circuit recently undermined this principle by indicating that the law of the flag may not receive deferential treatment in every traditional maritime case.[68] Rather than altering the Lauritzen-Rhoditis test when the shipowner is not a party to the claim, Fifth Circuit courts should prioritize simplicity and predictability and apply the same test that has worked for decades.[69]
[1] See generally Ganpat v. E. Pac. Shipping PTE., Ltd., 642 F. Supp. 3d 524, 533–36 (E.D. La. 2022), rev’d and remanded Ganpat v. E. Pac. Shipping PTE, Ltd., 100 F.4th 584 (5th Cir. 2024).
[2] See generally id.
[3] See generally id.
[4] See generally id.
[5] See Lauritzen v. Larsen, 345 U.S. 571, 592 (1953).
[6] Carbotrade S.p.A. v. Bureau Veritas, 99 F.3d 86 (2d Cir. 1996) (quoting Carbotrade S.p.A. v. Bureau Veritas, 901 F.Supp. 737, 743 (S.D.N.Y. 1995)).
[7] Ganpat v. Eastern Pacific Shipping PTE, Ltd., 100 F.4th 584, 595 (5th Cir. 2024).
[8] See generally id.
[9] See id. at 589.
[10] Lauritzen v. Larsen, 345 U.S. 571, 582–93 (1953); Hellenic Lines, Ltd. v. Rhoditis, 398 U.S. 306, 309 (1970).
[11] Fogleman v. ARAMCO (Arabian Am. Oil Co.), 920 F.2d 278, 282 (5th Cir. 1991) (first citing Lauritzen v. Larsen, 345 U.S. 571, 582–93 (1953); and then citing Hellenic Lines, Ltd. v. Rhoditis, 398 U.S. 306, 309 (1970)). Some courts articulate the fourth factor as “allegiance of the defendant shipowner.” See Lauritzen, 345 U.S. at 587 (1953). However, in cases where the shipowner is not a defendant, courts look to the allegiance of the defendant, regardless of his or her title. See Coats v. Penrod Drilling Corp., 61 F.3d 1113, 1120 (5th Cir. 1995).
[12] Fogleman, 920 F.2d at 282.
[13] Id.
[14] Id.
[15] Id.
[16] Ganpat v. E. Pac. Shipping PTE, Ltd., 100 F.4th 584, 591, 597 (5th Cir. 2024).
[17] Id. at 596–97.
[18] Id. at 594–97.
[19] Id. at 592 (quoting Solano v. Gulf King 55, 212 F.3d 902, 905–07 (5th Cir. 2000)).
[20] Lauritzen v. Larsen, 345 U.S. 571, 585 (1953).
[21] Hellenic Lines, Ltd. v. Rhoditis, 398 U.S. 306, 308 (1970).
[22] Ganpat, 100 F.4th at 592–93.
[23] Fogleman v. ARAMCO (Arabian Am. Oil Co.), 920 F.2d 278, 283 (5th Cir. 1991).
[24] Id. at 282–83.
[25] See id.
[26] Lauritzen v. Larsen, 345 U.S. 571, 585 (1953).
[27] Phillips v. Amoco Trinidad Oil Co., 632 F.2d 82, 86–87 (9th Cir. 1980).
[28] See, e.g., Rationis Enters. Inc. of Panama v. Hyundai Mipo Dockyard Co., 426 F.3d 580, 587 (2d Cir. 2005); Coats v. Penrod Drilling Corp., 61 F.3d 1113, 1120 (5th Cir. 1995); Ganpat v. E. Pac. Shipping PTE., Ltd., 642 F. Supp. 3d 524, 531 (E.D. La. 2022), rev’d and remanded Ganpat v. E. Pac. Shipping PTE, Ltd., 100 F.4th 584 (5th Cir. 2024).
[29] Rationis, 426 F.3d at 586.
[30] Id. (quoting Carbotrade S.P.A. v. Bureau Veritas, 99 F.3d 86, 90 (2d Cir.1996)).
[31] Coats, 61 F.3d at 1120.
[32] Id.
[33] Id.
[34] See id.
[35] See generally id. In its explanation, the court stated, “MIS is not a shipowner and therefore [the law of the flag] has no specific application to it.” Id. at 1120. It did not elaborate on whether this reasoning should extend to traditional maritime cases where the law of the flag is ordinarily given “cardinal importance.”
[36] See Ganpat v. E. Pac. Shipping PTE., Ltd., 642 F. Supp. 3d 524, 533–36 (E.D. La. 2022).
[37] Id. at 530.
[38] Id.
[39] Id.
[40] Id. at 531–36.
[41] Id. at 531–32, 534.
[42] Id. at 540.
[43] Id. at 532.
[44] Id. at 532–36 (“Factor two—the law of the flag—is not given any weight by the Court.”).
[45] Id. at 533.
[46] Id. at 537.
[47] Id.
[48] Id. at 537–38.
[49] See id.
[50] See id.
[51] See id.
[52] Ganpat v. Eastern Pacific Shipping PTE, Ltd., 100 F.4th 584, 595 (5th Cir. 2024).
[53] Id.
[54] Id. at 591 (quoting Solano v. Gulf King 55, 212 F.3d 902, 906 (5th Cir. 2000)).
[55] See id. at 595.
[56] Id. at 595. (emphasis added).
[57] Id.
[58] Id.
[59] See id.
[60] See id.
[61] Lauritzen v. Larsen, 345 U.S. 571, 591 (1953).
[62] See id. at 585.
[63] See generally id. The Lauritzen court explained that the law of the flag receives heightened significance based on the transient nature of the plaintiff’s work. It did not attribute its importance to the defendant’s shipowner status.
[64] See generally id.
[65] Id. at 585–86.
[66] See generally id.
[67] Carbotrade S.P.A. v. Bureau Veritas, 99 F.3d 86, 94 (2d Cir. 1996) (dissenting, J. Van Graafeiland) (quoting Lauritzen, 345 U.S. at 585).
[68] See Ganpat v. Eastern Pacific Shipping PTE, Ltd., 100 F.4th 584, 595 (5th Cir. 2024).
[69] See generally Lauritzen, 345 U.S. at 591.