Travelers Indemnity Co. v. Atlantic Express Line, Pacindat Mutual Protection & Indemnity Association, Ltd.

Citations: 837 F.2d 187; 1989 A.M.C. 911; 1988 U.S. App. LEXIS 1527; 1988 WL 3104Docket: 86-3927

Court: Court of Appeals for the Fifth Circuit; February 8, 1988; Federal Appellate Court

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The appeal concerns the district court's exercise of personal jurisdiction over Pacindat Mutual Protection Indemnity Association, Ltd., an alien insurance company, in a case involving cargo damages under The Carriage of Goods by Sea Act (COGSA). Travelers Indemnity Co., as the subrogated cargo underwriter, served Pacindat by mail at its Bermuda headquarters under the Louisiana Long-Arm Statute. The district court confirmed the adequacy of this service, referencing the Louisiana Supreme Court's decision in First Guaranty Bank v. Attorney's Liability Assurance Society, Ltd., which established that such service is permissible.

Pacindat contested the jurisdiction but did not adequately raise federal due process concerns regarding minimum contacts during the trial or appeal, resulting in waiver of that argument. After a bench trial, the district court found Pacindat liable for negligent stowing and mishandling of lard shipments, awarding Travelers $56,738.01, after applying a $20,000 credit for policy deductibles. Pacindat's appeal centers solely on the claim of improper service of process, not addressing the broader jurisdictional issues. The court emphasized that personal jurisdiction analysis involves both proper service under Federal Rules and state law, as well as constitutional due process, but focused primarily on the service aspect in this instance.

Pacindat, a Bermuda-based protection and indemnity insurer, entered into a contract with Atlantic to insure cargo on the M/V FREEPORT EXPRESS. Travelers initiated a lawsuit against Pacindat under Louisiana's direct action statute, which allows direct lawsuits against insurers. Pacindat contended that service of process for direct actions must adhere to the Louisiana Insurance Code, specifically requiring service through the Secretary of State for alien insurers. Travelers countered that the statute allows for service by "any other method," including mail under Louisiana's Long-Arm provisions.

The Louisiana Supreme Court's decision in First Guaranty Bank v. Attorney's Liability Assurance Society, Ltd. resolved similar jurisdictional issues. In that case, service was performed according to the direct action statute by sending a complaint to the Secretary of State. The insurer challenged jurisdiction, asserting it was not conducting business in Louisiana. The court ruled that the state's long-arm statute, which permits jurisdiction up to constitutional due process limits, takes precedence over the direct action statute, allowing for alternative service methods.

Following the First Guaranty precedent, the court determined that Travelers effectively served Pacindat by mailing a copy of the complaint to its Bermuda office. The ruling confirmed that jurisdiction over Pacindat is governed by the Louisiana Long Arm Statute, which permits service by mail. The court affirmed this decision. Initially, Travelers had also sued Atlantic and Terra, both of whom were insolvent and dismissed without response. Travelers later added Through Transport Mutual Insurance Association and Pacindat (P.I.) Management, Ltd. as defendants, though both were subsequently voluntarily dismissed from the suit.