TCW Special Credits v. Chloe Z Fishing Co.

In this action, the holder of a preferred ship mortgage caused a tuna fishing boat to be arrested and sold. Former crewmen then intervened to assert damage claims for unpaid wages, arguing that because no written employment agreement had been provided, they were entitled under federal statutory law to be paid at the same rate as the captain of the vessel. The district court entered summary judgment in favor of the wage claimants, and the mortgagee has appealed. We reverse and remand.

FACTS AND PRIOR PROCEEDINGS

The F/V CHLOE Z is an American-flagged tuna purse seine boat 2 that operates out of ports in the Western Pacific Ocean. The CHLOE Z was formerly owned and operated by the Chloe Z Fishing Company, Inc. (“CZFC”), a single-asset Northern Mariana Islands corporation.

The CHLOE Z generally carried a crew of seventeen, consisting of a fish captain, chief engineer, navigator (master), assistant engineer, helicopter pilot, deck boss, cook, skiff driver, speed boat driver, and eight deck hands (e.g., oilers and net stackers). Typical of the industry, individual crew members of the CHLOE Z were paid a rate, known in the industry as a “lay share,” in lieu of wages. A crewman’s…