Bournias v. Atlantic Maritime Co., Ltd.

Brief Fact Summary

Bournias (Plaintiff) sued Atlantic Maritime (Defendant) under Panamanian law for back wages claimed to be due.  Suit was brought in U.S. federal court beyond the Panamanian statutory limit.

Synopsis of Rule of Law

A statute of limitations is substantive, and therefore applicable in any forum, if it extinguishes the right sued upon and not the remedy.

Facts

Bournias (Plaintiff) was a seaman employed aboard a ship of registered in Panama and owned by Atlantic Maritime (Defendant).  He brought suit against Defendant for certain unpaid wage benefits he claimed were due him under the labor code of Panama.  The suit was instituted in U.S. federal court beyond the general statute of limitations providing for actions brought under the Panamanian code.  Defendant moved to dismiss the suit as being barred by that statute of limitations.

Issue

Will a foreign statute of limitations be enforceable as substantive law in the forum if it extinguishes the right sued upon rather than only barring the remedy?

Held

(Harlan, J.)  Yes.  A forum called upon to enforce a right arising under foreign law is generally held to be privileged to apply its own rules of procedure to the case.  In that view, statutes of limitation have generally been held to be procedural.  An exception to this rule arises when the right sued upon is so interconnected with the limitation that the limitation is thought to extinguish the right rather than only barring the remedy.  Rather than trying to determine if the foreign jurisdiction views its own statute of limitation as substantive or procedural or whether the forum would view it, in light of its own law, as substantive or procedural, a third more workable approach is presented.  The foreign substantive law to be enforced should be examined to see if there is a specific statute of limitations engrafted on the specific right sued upon or the statute of limitations is specifically pointed at the right sued upon.  In the present case, the specific right sued upon is covered only by a general statute of limitations for the entire labor code.  Certain specific rights within the code contain special limitations that are exempt from the general limitation.  For that reason, this court finds that the limitation that relates to the right sued upon in this case is procedural and not applicable in this court.  The suit, being still maintainable under the forum statute of limitations, is not barred.

Discussion

The Restatement (Second) on Conflicts holds that an action will not be maintained if it is not timely under the forum’s law.  It will be maintainable, if timely by the forum’s law, even if it would be barred where the cause of action arose.  One exception in accord with the principal case is where the applicable foreign limitation bars the right and not only the remedy.