Case:
Civil Action No. 85-4794-Z
Location:
UNITED STATES DISTRICT COURT FOR THE DISTRICT OF MASSACHUSETTS
Attorneys:
Philip E. Cleary Esq. Gerald T. Anglin Esq. for Plaintiff. Richard H. Pettingell Esq. for Defendant.
Schlumberger Technologies the defendant in this case has acquired an offshore oil-drilling operation once run by Sedco Maritime Inc. Plaintiff Donal J. Kelley worked on several of Sedco/Schlumberger's rigs around the world from 1975 until May 1985 when he was given a series of urine sample drug tests administered by defendant and subsequently terminated. Kelley in an action removed to this court from Suffolk Superior Court seeks damages for breach of his employment contracts during the period 1975-1983 and on various legal theories for his 1985 termination.
Now before me are several motions pertaining to the discharge claims. Schlumberger seeks the dismissal of Count Two of plaintiff's amended complaint which is based on admiralty law. Both parties request a determination of the law which shall govern the resolution of plaintiff's several wrongful termination claims.
Defendant's motion to dismiss Count Two is allowed. Kelley claims a cause of action in maritime law for a wrongful discharge based on the holding of Smith v. Atlas Off-Shore Boat Service Inc. 653 F.2d 1057 (5th Cir.1981) in which the Fifth Circuit held that a discharge in retaliation of a seaman's exercise of his legal right to file a personal injury action against the employer constitutes a maritime tort. Atlas 653 F.2d at 1063. Although Atlas is distinguishable in that there was no diversity jurisdiction plaintiff argues that the policies underlying Atlas should be extended to the facts of this case.
In subsequent decisions the Fifth Circuit has refused to interpret Atlas in the broad way suggested by plaintiff. In Buchanan v. Boh Brothers Construction Company 741 F.2d 750 (5th Cir.1984) it refused to extend the Atlas cause of action to shipbuilders who were "maritime employees" but not "seamen." In Belanger v. Keydril Co. 596 F. Supp.823 (E.D. La. 1984) aff'd without opinion 772 F.2d 902 (5th Cir.1985) it affirmed the District Court holding that a seaman did not have a cause of action under general maritime law for a claim of wrongful discharge based on age discrimination agreeing with the lower court's reading of Atlas to create a cause of action only to support rights already existing under maritime law such as those created under the Jones Act. Kelley's wrongful discharge claims are based on theories of ordinary contract and tort law not peculiarly maritime-based causes of action. Atlas therefore does not apply and Count Two is dismissed. *fn1
Turning to the choice of law issue the parties have assembled a stipulated list of relevant facts which chronicle between forty and fifty contacts during the period of plaintiff's employment with over a dozen different places separated by thousands of miles. Plaintiff characterizes these facts as converging generally on Massachusetts while defendant views Texas as the pivotal location except for one aspect for which Massachusetts law is more favorable. The arguments on both sides are convoluted as both parties seek to avoid the most reasonable choice of law which is Louisiana. *fn2
Defendant argues for the law of Texas the state of incorporation of defendant and the home office of that division involved in this lawsuit. However it would apply Massachusetts law to any claim for punitive damages.
Because this is a diversity case Massachusetts conflicts law governs the choice of law. Engine Specialties Inc. v. Bombardier Limited 605 F.2d 1 19 (1st Cir.1978) (citing Klaxon Co. v. Stentor Electric Mfg. Co. 313 U.S. 487 (1941)) aff'd on reh'g 615 F.2d 575 (1st.Cir.) cert. denied 446 U.S. 983 reh'g denied 449 U.S. 893 (1980). Under that law Kelley's wrongful termination claim is properly viewed as one based in contract not tort law. *fn3 Fortune v. National Cash Register Co. 373 Mass. 96 364 N.E.2d 1251 (1977). While it is true as plaintiff argues that Massachusetts courts recognize a tort-based action for wrongful interference with an advantageous business relationship Comey v. Hill 387 Mass. 11 438 N.E.2d 811 (1982) this tort applies only against a third party who has disrupted a relationship existing between two others. No Massachusetts case extends the cause of action to charge a contracting party also as tort-feasor.
Three basic principles determine the choice of law in contract cases. Court will look first to the parties intent and honor their expressed choice. Massengale v. Transitron Electronic Corporation 385 F.2d 83 86 (1st Cir.1967); Restatement (Second) of Conflict of Laws Sec. 186 (1971). In the absence of any articulation of the parties' intent the law of the place where the contract was made will govern. Molner v. Western Electric Co. 525 F.2d 521 (1st Cir.1975) cert. denied 404 U.S. 987 (1976). If that cannot be ascertained the law of the place of performance or breach decides the issue. Elder v. New York Central R.R. 152 F.2d 361 (6th Cir.1945).
Neither party argues for a mutually agreed choice of law. Given that an oral contract made by telephone is deemed to be made at the place where the accepting party is located Joseph v. Krull Wholesale Drug Co. 147 F. Supp.250 (E.D. Pa. 1956) aff'd 245 F.2d 231 (3d Cir.1957) the stipulated facts are inconclusive as to the place of contracting. The employment contract in effect when Kelley was terminated was based on a conversation in South Africa a telephone call from Texas to Massachusetts and a flight by Kelley from Massachusetts to Louisiana to begin work.
That leaves the location of performance or breach. Plaintiff worked aboard an oil rig off the coast of Louisiana at the time in question. One of the drug tests was administered on the rig and another in Lafayette Louisiana. Defendant instructed Kelley in Louisiana on June 6 to return to his home pending receipt of the test results and by telephone call to New Hampshire on June 7 1985 defendant terminated his employment. Given these facts the principles Elder establishes for itinerant railroad employees are equally appropriate for circuit riding oil rig maintenance crewmen. The breach of contract claim will therefore be determined in accordance with the law of Louisiana.
Both parties agree that the remaining issues surrounding Kelley's termination are based in tort law. The basic choice of law rule for tort claims is lex loci delecti. Bombardier 605 F.2d at 19 Restatement (Second) of Conflict of Laws SEC.(s) 145 146 (1971). Only when Massachusetts law has an especially strong policy which would be contravened by the application of foreign law and an overwhelming number of Massachusetts contacts underlie the tort will Court impose Massachusetts law instead of following the basic rule. Pevoski v. Pevoski 371 Mass. 358 358 N.E.2d 416 (1976). In this case the Massachusetts contacts are exceedingly limited. Massachusetts had been plaintiff's home during most of the period of his employment but at the time of his discharge he was residing in New Hampshire and the only remaining Massachusetts connection was a bank account into which his pay was deposited. All of the events significant to his claim took place in Louisiana. It was there that the tests were administered and he was told to return to New Hampshire preliminary to his being discharged.
Defendant also argues that whatever the choice of foreign law it should respect the Massachusetts policy against the imposition of punitive damages. Defendant rightly observes that punitive damages cannot be awarded under Massachusetts law unless expressly allowed by statute. Computer Systems Engineering v. Qantel Corp. 571 F. Supp.1365 1369-70 (D. Mass. 1983) (citing Schulh of v. Northeast Cellulose Inc. 545 F. Supp.1200 1208 (D. Mass. 1982)) aff'd740 F.2d 59 (1st Cir.1984). In the Qantel case Court Keeton entered a judgment notwithstanding the verdict which had awarded punitive damages to the plaintiff. Despite significant California contacts Court Keeton held that a jury's award of punitive damage based on California law had to give way to the Massachusetts policy against such damages because "[w]hen a court combines elements of the laws of different states [that] it may upset the delicate balance achieved by legislative compromise." The analysis of the Qantel and Schulhof cases is particularly appropriate in this case given the virtually unlimited number of choice of law permutations suggested by the
contacts listed by the parties. *fn4
For the reasons stated it is ordered that all issues pertaining to the discharge claim will be decided in accordance with the law of Louisiana.
The motion to dismiss Count Two is allowed.
Notes:
*fn1 This ruling has only a marginal effect on the procedural history of this case because there is diversity jurisdiction for all of plaintiff's claims.
*fn2 Plaintiff proposes the following choices of law:
(1) Massachusetts law Contract Claims
(2) Louisiana law Louisiana based Invasion of Privacy
(3) Federal General Invasion of Privacy
Common law at Sea
(4) Texas law Punitive Damages
(5) Maritime law or Wrongful Termination
Massachusetts law
*fn3 Both parties agree that the 1975-1983 contractual claims can be decided without resort to the contract law of any jurisdiction.
*fn4 It is possible that the issue of punitive damages represents a false conflict as neither party has to date considered whether punitive damages are recoverable under Louisiana law.