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The families of 17 crew members who died on the four-masted schooner Fantome when it disappeared and sank off the coast of Honduras during Hurricane Mitch in 1998 will finally get their day in a U.S. court. In a decision that opens the doors of U.S. courts a bit wider, the 11th U.S. Circuit Court of Appeals has ruled that, whether or not a ship docks in the United States or has U.S. crew members, if the ship’s owner is headquartered in the United States it can be sued there. The ruling, which was handed down last week, reverses a January 2002 decision by U.S. District Judge Joan A. Lenard in Miami. She dismissed the case against Miami Beach-based Windjammer Barefoot Cruises and said that families of the crew must sue in Panama, where the Windjammer subsidiary that owned the ship was incorporated, because the Fantome and its crew had little contact with the United States. The Fantome did not dock at a U.S. port and had its homeport in Honduras. It had no U.S. crew members. It was flagged under the laws of Equatorial Guinea, and it did not sink in U.S. waters. According to the court’s ruling, Windjammer incorporates a company in a foreign country that owns each of its ships, but the cruise line directs the ships from the company’s headquarters in Miami Beach. “Every decision that was not made on the ship appears to have been made at the Miami Beach headquarters,” wrote the court in a per curiam opinion signed by Judges Charles R. Wilson, Peter T. Fay and Richard Mills, who is from the Central District of Illinois and was sitting by designation in the case. “The allegiance and domicile of the ship owners and the presence of a United States base of operations … establish contacts sufficient to determine that United States law is applicable.” James A. Cobb Jr., a partner with Emmett, Cobb, Waits & Kessenich in New Orleans, who represented Windjammer at the trial and appellate level, could not be reached before deadline. Attorneys for the families of the crew members said the decision showed that companies based in the Unites States could no longer shield themselves from lawsuits in the United States by creating foreign corporate structures. “We proved through discovery that they are really based here despite the fact they carefully formed separate companies incorporated elsewhere,” said Brett Rivkind, a partner with Rivkind Pedraza & Margulies in Miami. Rivkind represented the plaintiffs at trial along with Steven Marks, a partner with Podhurst, Orseck, Josefsberg, Eaton, Meadow, Olin & Perwin in Miami, and William Huggett of the Huggett Law Firm in Miami. Joel Perwin, a partner with Podhurst Orseck, argued the case before the 11th Circuit. “For a defendant who works in this forum, who benefits and profits in this forum, it can hardly be inconvenient to litigate in their hometown,” Marks said. Nevertheless, the 11th Circuit ruling came as a surprise to some observers because the Fantome appeared to have a very tenuous connection to the United States. “This is surprising, because nearly everything about this case is foreign. Nothing about this tragedy is American,” said Bob Jarvis, an admiralty law professor at Nova Southeastern University’s law school. “The implication is that no matter where a ship sinks, it suddenly becomes a U.S. case simply because the ship owner is domiciled here. I would have thought the 11th Circuit would have said you should draw the line somewhere,” said Jarvis, who added that previous rulings have not placed so much weight solely on where the company is based. The disappearance of the ship and its crew of 31 gained widespread attention and was even the subject of a book published in 2001, “The Ship and the Storm: Hurricane Mitch and the Loss of the Fantome. “ Families of 14 of the 31 deceased crew members have settled with Windjammer in out-of-court settlements and will not be part of the forthcoming litigation. In late October 1998, the Fantome was sailing in the Caribbean when Mitch, a Category 5 hurricane, began forming in the Atlantic. In a fateful decision, according to the court’s ruling, orders were given from the Windjammer’s Miami Beach headquarters to discharge all passengers and nonessential crew members in Belize and then return to sea in an effort to outrun the hurricane. On Oct. 27, 1998, the ship disappeared and sank. In April 1999, the family members of the deceased crew members filed suit in U.S. District Court in Miami against Windjammer, claiming that the company negligently ordered the ship back to sea and directly into the violent hurricane. The family members are seeking recovery of wrongful-death and survival damages under the Jones Act and the Death on the High Seas Act.

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