John Doe v. Star Clippers, Ltd, Star Clippers, GSA d/b/a Star Clippers Americas, and Luxembourg Shipping Services

Lipcon, Margulies & Winkleman, P.A

August 19, 2013

John Doe v. Star Clippers, Ltd, Star Clippers, GSA d/b/a Star Clippers Americas, and Luxembourg Shipping Services – Part 3

Motion to Strike Portions of Errata Sheets

In this motion to strike, our qualified cruise injury lawyers ask the Court to strike portions of two errata sheets filed by the Defendant cruise line. Errata sheets are used to alter deposition testimony after the fact. In this case, a Defendant overreached with their changes and our lawyers asked for the Court’s intervention to make sure that the Defendants were not permitted to take unfair advantage of the rules of civil procedure to disadvantage our client.

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF FLORIDA
MIAMI DIVISION
CASE NO.: 12-CV-23768-KING/McALILEY
JOHN DOE,
Plaintiff,

v.

STAR CLIPPERS, LTD. CORP.,
STAR CLIPPERS GSA, INC., d/b/a
STAR CLIPPERS AMERICAS and
LUXEMBOURG SHIPPING SERVICES, S.A.,
d/b/a STAR CLIPPERS,
Defendants.
_____________________________/

PLAINTIFF’S MOTION TO STRIKE PORTIONS OF THE IMPROPER ERRATA SHEETS FILED BY DEFENDANTS

Plaintiff, JOHN DOE, by and through his undersigned counsel, hereby files thisMotion to Strike portions of the Improper Errata Sheets provided by Defendants, attached hereto as Exhibits 1 and 2, and as good cause therefore relies on the following:

THROUGH THE IMPROPER USE OF ERRATA SHEETS, THE DEFENDANTS SEEK TO ALTER THE DAMNING TESTIMONY OF THEIR CORPORATE REPRESENTATIVES. THAT TESTIMONY TAKEN DURING JURISDICTIONAL DISCOVERY DEMONSTRATES THAT THE DEFENDANTS FAILED TO OBSERVE CORPORATE DISTINCTIONS AND THAT THEIR MOTION TO DISMISS IS GROUNDLESS. TO ESCAPE THIS TESTIMONY, EACH OF THE DEFENDANTS FILED ERRATA SHEETS THAT SUBSTANTIALLY ALTERED THEIR TESTIMONY. THE COURT SHOULD STRIKE PORTIONS OF THESE ERRATA SHEETS AS VIOLATING THE SPIRIT AND INTENT OF RULE 30(E).

I. Introduction

Plaintiff was injured while working on a Star Clippers ship as an electrical engineer. Plaintiff filed his complaint in this matter on October 16, 2012 [D.E. 1] against Defendants STAR CLIPPERS, LTD., STAR CLIPPERS GSA, INC., and LUXEMBOURG SHIPPING SERVICES, S.A. The Complaint alleged that personal jurisdiction exists in Florida and that the Defendants have a base of operation in Miami, FL.

In response to Plaintiff’s complaint, the Defendants filed a Motion to Dismiss seeking dismissal for lack of personal jurisdiction and forum non conveniens. [D.E. 24]. After the filing of the Motion to Dismiss, [D.E. 24], the parties agreed to a period of jurisdictional discovery and requested same from this Honorable Court. [D.E. 25]. The Court granted this motion and stayed a ruling on the Defendants’ Motion to Dismiss until the completion of limited jurisdictional discovery.

Thereafter the parties conducted limited jurisdictional discovery during which Plaintiff deposed each of the Defendants’ corporate representatives. Deposition testimony repeatedly demonstrated that the Defendants are truly one corporation that is registered to do business in Florida and that maintains a base of operations in Florida.

Realizing that their deposition testimony was damning for purposes of challenging personal jurisdiction and forum, the Defendants materially altered that testimony after the fact through the improper use of Federal Rule of Civil Procedure Rule 30(e). The Defendants’ use of errata sheets went far beyond accepted practice by turning each deposition into a take home examination where the Defendants said one thing under oath, and then went back and planned artful and/or contradictory responses after the fact. This practice is barred under the majority interpretation of Rule 30(e).

II. The law regarding the use of errata sheets to alter deposition testimony is clearly in favor of preventing substantive changes after the fact absent extraordinary circumstances. No such extraordinary circumstances exist herein.

Federal Rule of Civil Procedure 30(e) allows a party 30 days after receiving notice that their testimony is ready during which, “if there are changes in form or substance, to sign a statement listing the changes and the reasons for making them.” Id. The vague nature of Rule 30 has led to confusion amongst the Court’s and two approaches to its interpretation. The majority approach is to strictly construe rule 30 so as not to allow anything beyond typographical mistakes in transcription, or at the very least to not allow a contradictory change to the original testimony.

This view was perhaps best captured in the case of Greenway v. International Paper Co., 144 F.R.D. 322 (W.D. La. 1992). In Greenway, the deponent altered her sworn testimony, changing simple “no” answers to “yes” answers, followed by new lengthy explanations.[1] Additionally, the testimony changed distances, locations, etc. See id. Striking these material changes, the Court stated that “[a] deposition is not a take home examination”. Id at 323. The Court went on to explain its decision by stating that Rule 30, “cannot be interpreted to allow one to alter what was said under oath. If that were the case, one could merely answer the questions with no thought at all then return home and plan artful responses.” Id at 325.[2]

Although slightly less restrictive, the Tenth Circuit Court of Appeal also follows a strict interpretation of Rule 30(e). Under the Tenth Circuit Court’s approach, changes in a deponent’s testimony are judged similarly to sham affidavits given solely to create a material issue of fact and prevent the granting of a motion for summary judgment. See Garcia v. Pueblo Country Club, 299 F.3d 1233, 1242 n. 5 (10th Cir. 2002). This ruling was officially adopted in Burns v. Board of County Commissioners, 330 F.3d 1275 (10th Cir. 2003).

Similarly, the Ninth Circuit Court of Appeals in Hambleton Bros. Lumber v. Balkin Enterprises, Inc., 397 F.3d 1217 (9th Cir. 2005) held that the “Rule 30(e) is to be used for corrective, and not contradictory, changes.” Id at 1226. Using the same sham affidavit approach, the Ninth Circuit held that the rule does not permit “changes offered solely to create a material factual dispute in a tactical attempt to evade an unfavorable summary judgment” or in this case, a denial of Defendants’ motion to dismiss. Id at 1225.

The Seventh Circuit Court of Appeals takes the most liberal approach to the majority strict interpretation of Rule 30(e), holding that substantive changes are not permitted that “actually contradict[] the transcript … unless it can plausibly be represented as the correction of an error in transcription.” Thorn v. Sundstrand Aerospace Corp., 207 F.3d 383, 385 (7th Cir. 2000). As Plaintiff will further demonstrate below, even under this most liberal approach to the strict interpretation of Rule 30(e), the Defendants clearly overreached with their errata sheets.

The Third Circuit Court of Appeals has recently joined with the Tenth, Ninth, and Seventh Circuits in forbidding substantive changes under Rule 30(e). In EBC, Inc. v. Clark Building Systems, Inc., 618 F. 3D 253, 258 (3rd Cir. 2010), the Third Circuit issued a similar holding to Thorn and Hambleton, but to ensure that flexibility existed to allow for changes in appropriate circumstances, the Court held that each case should be considered under its own fact-specific circumstances. Id at 270. Accordingly, under this standard, the Court has discretion to admit or deny material changes to deposition testimony. Id. Again, as Plaintiff will further set forth below, in these circumstances the Court should use its discretion to deny the changes made by the Defendants.

Lastly, although the Eleventh Circuit Court of Appeals has not expressly ruled on this issue, it seems clear that if presented with the question the Court will follow the majority approach of strict interpretation. The most commonly cited case out of the Eleventh Circuit that deals with the issue presented herein is Reynolds v. IBM, Corp., 320 F. Supp. 2d 1290, 1301 (M.D. Fla. 2004), aff’d 125 Fed. Appx. 982 (11th Cir. 2004). In Reynolds, the Eleventh Circuit affirmed the District Court’s decision to disregard errata changes where the deponent did not exhibit any obvious confusion during deposition that would justify his material alterations. Further, in the dissent of Amlong & Amlong, P.A. v. Denny’s, Inc., 500 F.3d 1230, 1270 (11th Cir. 2007), Judge Hill noted “[w]e too have affirmed a district court’s decision to disregard an errata sheet that attempted to make material changes to a deposition on the grounds that the deponent was “confused” at the time of the deposition.” However, the majority opinion in Amlong did not address the issue.

In contrary to the well-reasoned majority approach outlined above, only the Second Court of Appeals has adopted a liberal interpretation of rule 30(e) allowing substantive changes to deposition testimony. See Podell v. Citicorp Diners Club, Inc., 112 F.3d 98 (2nd Cir. 1997).

III. The Defendants’ errata sheets make substantive changes to their deposition testimony that exceed the permissible changes under rule 30(e). These changes were not made in good faith, but rather made solely to avoid an unfavorable ruling on the Defendants’ pending motion to dismiss.

As jurisdictional discovery proceeded, it became abundantly clear that the Defendants failed to observe corporate formalities and that all of the Star Clippers entities are just corporate shells of Star Clippers, Ltd. and further that all of the various entities are owned and controlled by Mikael Krafft. In order to undermine the facts ascertained during discovery, the Defendants changed the testimony of their corporate representatives after the fact and in a manner that is inconsistent with the spirit and purpose of rule 30(e). These inappropriate changes to the Defendants’ testimony are outlined below and should be stricken by this Honorable Court:

Testimony of Mikael Krafft on behalf of Star Clippers, Ltd

  • When asked if he owned Luxembourg Shipping Services, Mr. Krafft originally answered: “No, I am not. I’m not quite sure if the owner – – I might be part owner, I guess.” Deposition of Mikael Krafft, Pg. 8, L: 12. [D.E. 47-2].

The Defendants now seek to change that testimony to: “No, I am not. Luxembourg Shipping Services is owned by Chatelain Invest and the Kimale Foundation.”

  • When asked if there were any other owners of LSS, Mr. Krafft originally answered: “I think it’s a company called Eran, and that’s Captain Shamim is also part owner. But I am not sure on this.” Id at pg. 8, L: 16.

The Defendants now seek to change that testimony to: “There are no other owners of Luxembourg Shipping Services. Luxembourg Shipping Services is owned by Chatelain Invest and the Kimale Foundation.”

  • When asked if one of the other owners of Luxembourg Shipping Services was Eran Immo Limited, another Corporation owned by Mikael Krafft, Mr. Kraft originally answered: “Yes.” Id at pg. 8, L: 20.

Defendants now seek to change that testimony to: “Yes. However, there are no other owners of Luxembourg Shipping Services.” Not only does this answer add information that was not previously given during the deposition, it also contradicts the change in testimony that Defendants seek to make the previous answer, i.e. that LSS is owned by Chatelain Invest and the Kimale Foundation.

  • When asked why Luxembourg Shipping Services was held in the name of a company owned by Mikael Krafft instead of just owned directly by Mikael Krafft, Mr. Krafft answered: “I don’t really know this, because I don’t understand myself, but that is absolutely of no importance because there are no assets. There is nothing in this company. I don’t think that there is any special reason.” Id at pg. 9, L: 18

Defendants now seek to change that testimony to: “Luxembourg Shipping Services is not in the name of Eran. Luxembourg Shipping Services is owned by Chatelain Invest and Kimale Foundation.”

  • When asked if the entire cruise line is operated from Star Clippers Ltd.’s office, Mr. Krafft originally answered: “Yes.” Id. At pg. 27, L: 21

Defendants now seek to change that testimony to: “Yes. However, the safe manning crews aboard the ships were arranged by Luxembourg Shipping Services.”

  • When asked if Star Clippers Ltd. acted as an agent for Star Clippers, GSA, the phone connection was lost and no answer was ever given to this question. See id at pg. 37, L: 23.

Defendants now seek to add new testimony that was never given by answering: “No.”

Testimony of Captain Farhat Shamim on behalf of Luxembourg Shipping Services

  • When asked if Star Clippers, Ltd. was in charge of crewing the vessel on which the Plaintiff was hurt, Captain Shamim testified: “Correct.” See Deposition testimony of Captain Farhat Shamim, 7, L: 12. [D.E. 47-1].

Defendants now seek to change this testimony to: “Currently, correct.”

  • When asked, “In 2009, was Star Clippers Ltd. in charge of crewing the Star Flyer?”, Captain Shamim testified: “That is correct.” Id at pg. 8, L: 9.

The Defendants now seek to change that testimony to: “That is correct for the crew other than the safe manning.”

  • When asked “Captain Shamim, who is the owner of Luxembourg Shipping Services?” Captain Shamim, the corporate representative of the company testified clearly and unequivocally: “Mr. Mikael Krafft, K-R-A-F-F-T.” Id at pg. 12, L: 22.

The Defendants now seek to alter that unequivocal testimony to: “I believe Mikael Krafft, but I am not certain. Mr. Krafft would have more knowledge regarding the details of the corporate structure of LSS.”

  • When Plaintiff followed up the last question and asked if Mikael Krafft was the “sole owner of Luxembourg Shipping Services”, again Captain Shamim testified clearly and unequivocally: “Yes.” Id at pg. 12, L: 25

Defendants now seek to change this clear testimony to the following vague answer: “I believe so, but I am not certain. Mr. Krafft would have more knowledge regarding the details of the corporate structure of LSS.”

  • When asked if Luxembourg Shipping Services is in charge of the day to day operations of the vessel, Captain Shamim clearly testified: “Correct. No they are not.” Id at pg. 31, L: 15.

Defendants now seek to change this clear testimony to: “Correct. No, they are not – however, LSS was in charge of the Safe Manning Crew that operated the ships.”

  • When asked what entity will take over Luxembourg Shipping Services responsibilities once it has been completely liquidated, Captain Shamim testified unequivocally: “Star Clippers.” Id at pg. 32, L: 16.

The Defendants now seek to change that clear testimony to a completely new entity that has never once been mentioned anywhere in discovery until this errata sheet. Defendant seeks to change this testimony to: “Malta International Shipping Services.”

  • When Plaintiff clarified the above question by stating “That’s star Clippers Limited, the Bahamian Corporation”, Captain Shamim clearly testified: “Correct, yes. Yes, because all pending matters are being taken over by Star Clippers Limited. It has nothing to do, so it depends until the liquidation is finished.” Id at pg. 32, L: 22-25.

The Defendants now seek to clearly contradict this previous sworn testimony by changing it to: “No. Malta International Shipping services will be taking over the hiring of the Safe Manning Crew. Star Clippers, Ltd., the Bahamian Corporation, is taking over all crew recruiting and hiring except for the safe Manning crew. There is nothing left for LSS to do, so it will be done when the liquidation is complete.”

IV. Conclusion

As repeatedly shown above, the Defendants either seek to change their testimony to completely contradictory answers, or change simple “yes” and “no” answers to long complicated explanations which were never mentioned at the depositions. No legitimate reasons exist to allow these changes. The witnesses were designated by the Defendants to testify on their behalf and no information became available to them after the depositions that was not readily available to them beforehand.

The testimony regarding the ownership of Luxembourg Shipping Services is emblematic of this issue. The original testimony on this point was clear. Both Star Clippers, Ltd and Luxembourg Shipping Services were asked this question and both gave the answers they gave under oath. There is no reason they should be allowed to substantially alter that testimony at a later date. Doing so is simply an abuse of Fed. R. Civ. Pro. 30(e) in violation of the majority rule.

WHEREFORE, Plaintiff respectfully requests that this Honorable Court strike the above portions of the Errata sheets provided by Star Clippers, Ltd. and Luxembourg Shipping Services.

CERTIFICATE OF CONFERENCE

In accord with Local Rule 7.1, Plaintiff twice attempted to contact counsel for the Defendant regarding the relief requested herein, but was unable to speak with Defense counsel. For the Court’s information, Defense counsel previously filed a notice of unavailability for the current date which explains Plaintiff’s inability to confirm Defendants’ position regarding this motion. Accordingly, Defendants’ opposition to the relief requested herein is unknown. Undersigned counsel files the instant motion in an abundance of caution to raise the issues herein with the Court. Should Defense counsel inform Plaintiff that they do not oppose the relief sought herein, undersigned counsel will file a notice of mootness with the Court.

RESPECTFULLY SUBMITTED,
LIPCON, MARGULIES,
ALSINA & WINKLEMAN, P.A.
Attorneys for Plaintiff
Suite 1776, One Biscayne Tower
Miami, Florida 33131
Telephone: (305) 373-301
Facsimile: (305) 373-6204

By: /s/ Eric Charles Morales
ERIC C. MORALES
FLORIDA BAR # 91875

 

[1] This exact same tactic was employed repeatedly by the Defendants herein.

[2] In passing language, the Sixth Circuit Court of Appeals has intimated that it would follow a similar course, but has not subsequently clarified or revisited the issue. See Trout v. FirstEngergy Generation Corp., 339 F.App’x 560, 565 (6th Cir. 2009) (quoting an Ohio District Court Case that reproduced the above language from Greenway).