The United States District Court for the District of Massachusetts recently dismissed claims against two foreign corporations which owned and operated a ship which damaged a pier in Boston Harbor in 2017, in American Home Assurance Company v. M/V One Helsinki f/k/a Helsinki Bridge.
Daisy Ship Holding S.A. (“DSH”) is a Panama company and the registered owner of Helsinki Bridge, the ship which damaged the Boston Harbor pier. K Line Ship Management (Singapore) PTE Ltd. (“KLSM”), a Singapore company, operated Helsinki Bridge. The ship was chartered and entered into a vessel services agreement with a Japanese corporation. Both the charter and vessel services agreement were negotiated in Panama and governed by the laws of Japan.
On December 5, 2017, Helsinki Bridge entered Boston Harbor and berthed at Conley Terminal, operated by the Massachusetts Port Authority (“Massport”). Helsinki Bridge was not properly secured, and during high winds in the night lines broke causing the ship to drift and damage the pier. Plaintiff American Home Assurance Company (“AHAC”) indemnified Massport for its property damage and losses pursuant to Massport’s insurance contract. AHAC then filed suit against DSH and KLSM seeking recovery of $950,000 in damages.
DSH and KLSM moved to dismiss AHAC’s claims, arguing the Court lacked personal jurisdiction over the foreign companies. The District Court agreed, finding that it could not exercise jurisdiction over DSH and KLSM as doing so would be inconsistent with the U.S. Constitution. In order to exercise specific personal jurisdiction over a defendant, a court must determine whether (1) the claim directly arises out of, or relates to, the defendant’s activities in the state; (2) the defendant’s in-state contacts represent “purposeful availament” of the privilege of conducting activities in and receiving the protection of the state; and (3) the exercise of personal jurisdiction is reasonable. The District Court started with analyzing whether there was purposeful availament of Massachusetts by DSH and KLSM. The Court held there was no purposeful availment, as neither DSH nor KLSM knew Helsinki Bridge was bound for Massachusetts or had any control over its destination. The charter and vessel services agreement relinquished control over Helsinki Bridge from DSH and KLSM to the Japanese corporation; therefore, the Court held, neither defendant had voluntarily entered Massachusetts. Additionally, Massachusetts was never mentioned as a destination in either the charter or the vessel services agreement, therefore neither defendant could foresee Helsinki Bridge would enter Massachusetts. Thus, as DSH and KLSM had not purposefully availed themselves of Massachusetts, the Court could not exercise specific personal jurisdiction over the foreign companies and dismissed the case.