A 2016 decision against an injured US Navy sailor has pushed a US appeals court to side with Japanese shipping giant NYK Line in a more than $260m legal dispute over a fatal 2017 crash in the Pacific Ocean.
A three-judge panel from the New Orleans-based Fifth Circuit Court of Appeals ruled unanimously that, despite NYK Line's business ties to the US, previous precedent determined that US courts have no jurisdiction over the collision that led to the US Navy's greatest loss of life since 1975.
"To be sure, NYK Line has considerable contacts with the United States," the judges said in the decision published on 30 April.
"But these are not 'so substantial and of such a nature' that NYK Line is essentially rendered at home in the United States."
The 2017 incident saw the 2,858-teu ACX Crystal (built 2008) tear a hole in the side of the USS Fitzgerald. The incident flooded the sailors' sleeping quarters on the warship, killing seven.
In 2019, 42 injured US Navy sailors and the families of the deceased sailors filed two separate lawsuits in the US federal court for the Eastern District of Louisiana.
They argued US courts have jurisdiction over NYK Line given its business ties to the US, including litigating in US courts.
In June 2020, Judge Lance Africk ruled those ties are a small part of NYK Line's business and that the lawsuits could not proceed.
On appeal, the three judges cited a 2016 decision against a US seafarer who was injured aboard a Norwegian-owned, Luxembourg-flagged ship working offshore of Russia.
Then, the same appeals court ruled it was not an "exceptional case" where applying general jurisdiction would be appropriate on one of the seafarer's named plaintiffs.
Writing on the sailors' lawsuit, the panel said it was bound to apply the same standard "whether we agree with [the previous rulings'] logic or not".
Writing concurring opinions, judges Jennifer Walker Elrod and Don Willett said the case would be a good candidate for an en banc appeal to settle questions of jurisdiction.
An en banc appeal is one where all the judges in a circuit court of appeals hear the case.
The sailors' attorney, David Schloss of Koonz McKenney Johnson & DePaolis, said he intends to ask for such a review.
Should their arguments fail there, they would have to rely on the Supreme Court taking up the case.
"While we are disappointed that justice for our clients is again delayed, we are pleased that the panel agreed with our arguments and reasoning, and recognised the double standard that NYK Line continues to ask the courts to approve of," he said in a statement to TradeWinds.
"We are grateful that the appeals court recognised the unfairness of this double standard and expressly invited us to seek further review before the entire court."
The circumstances around the crash have been contentious.
The Japan Transportation Safety Board said the USS Fitzgerald's watch was distracted and cited incomplete radar data on the ACX Crystal. The US National Transportation Safety Board took issue with the US Navy's policy of not broadcasting AIS data.
