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EXCEL SHIPPING CORP. v. SEATRAIN INTL. S.A.

April 13, 1984

EXCEL SHIPPING CORP., Plaintiff, against SEATRAIN INTERNATIONAL S.A., SOTECAN CONTAINER SERVICE and SEATRAIN BUNKER HILL, Defendants; ADIDAS (CANADA) LIMITED AND J.G. DURAND INTERNATIONAL, Plaintiffs, against S.S. SEATRAIN BUNKER HILL, her engines, boilers, etc., SEATRAIN INTERNATIONAL S.A., SEATRAIN LINES, INC. and CIE, MARITIME DES CHARGEURS REUNIS (C.M.C.R.), Defendants.


The opinion of the court was delivered by: GLASSER

GLASSER, United States District Judge:

This consolidated action arises out of damages sustained by the S/T Bunker Hill and its cargo while the vessel was en route from LeHavre, France to the Port of New York in March 1980. Three motions are presently before the Court: (1) S.A.F.E de Numaticos Michelin ("Michelin Spain"), which shipped the tires that allegedly caused the damage, and which is named as both defendant and third-party defendant in the consolidated action, seeks to dismiss the claims against it for lack of jurisdiction or, in the alternative, on grounds of forum non conveniens; (2) Compagnie Maritime des Chargeurs Reunis ("C.M.C.R."), the owner of the vessel, named as defendant or third-party defendant in the various suits, seeks to dismiss the in personam suits against it. C.M.C.R. also seeks to dismiss the in rem actions against the vessel in several of the suits in which the plaintiffs have failed thus far to attach the vessel; (3) Plaintiff Michelin Canada, the intended recipient of the tires shipped by Michelin Spain, moves either to dismiss, pursuant to Rule 12(b)(6), or for summary judgment, pursuant to Rule 56, on the counterclaim of C.M.C.R., in which C.M.C.R. alleges responsibility on the part of Michelin Canada for the damages sustained by the vessel. For the reasons set forth in this opinion, Michelin Spain's motion to dismiss is denied; C.M.C.R.'s motion to dismiss is granted only as to the in rem actions; and Michelin Canada's motion for summary judgment is granted.

 I. Background

 The plaintiffs initially brought individual suits in the United States District Court for the Southern District of New York against C.M.C.R. and the vessel's time charterer, Seatrain International S.A. Plaintiffs asserted in personam jurisdiction over C.M.C.R., a French corporation, and Seatrain, a foreign corporation having an office in New York, and in rem jurisdiction over the vessel.

 After the actions were consolidated, C.M.C.R. filed a third-party complaint against Michelin Spain, a Spanish corporation, alleging that the plaintiffs' losses were caused by Michelin Spain's negligent stowage and securing of 77 "giant off-the-road tires" within ocean containers carried aboard the vessel and destined for Canada. Michelin Spain was allegedly responsible for loading, stowing, securing and sealing of the tires into eight ocean containers, following their sale on consignment to Michelin Canada some time between December 1979 and February 1980. The tires were packed in containers at Michelin Spain's factory in Bilboa, Spain, loaded aboard a vessel known as the Atlantic Count for shipment to Le Havre, France, and then off-loaded and stowed aboard the Bunker Bill for the voyage to Montreal via New York, with earlier stops at Rotterdam and Bremerhaven. During the Bunker Hill's voyage, the tires allegedly became unsecured in one or more of the containers, which, in turn, caused other cargo aboard the vessel to become unsecured. As a result, cargo belonging to plaintiffs was allegedly lost or damaged, and the Bunker Hill was allegedly damaged as well.

 On July 2, 1982, Judge Knapp dismissed C.M.C.R.'s third-party complaint against ;Michelin Spain for lack of in personam jurisdiction based upon his finding that Michelin Spain was not "doing business" in New York State as required by § 301 of the New York Civil Practice Law and Rules (N.Y. C.P.L.R.). *fn1" Seatrain International then filed a third-party complaint against Michelin Spain, and moved, pursuant to Rule B(1) of the Supplemental Rules for Certain Admiralty and Maritime Claims of the Fed.R.Civ.P., *fn2" to attach certain debts owed to Michelin Spain by Michelin Tire Corporation (MTC), a New York corporation. These debts result from MTC's ongoing purchase of tires from Michelin Spain. Because the situs of the debts attached was in the Eastern District of New York, the plaintiffs moved to transfer the entire case to this District. The parties then filed the three motions now before this Court.

 II. Michelin Spain's Motion to Dismiss

 A. Jurisdictional Grounds

 Michelin Spain argues the ineffectiveness of the attachment of the debts as a jurisdictional predicate as follows: First, it contends that, in light of the Supreme Court's application of due process considerations to quasi-in rem attachments, see Shaffer v. Heitner, 433 U.S. 186, 53 L. Ed. 2d 683, 97 S. Ct. 2569 (1977), a Rule B(1) attachment would only be constitutional upon a showing of sufficient relevant contacts between the defendant and the forum. Secondly, Michelin Spain contends that its contacts with this forum are insufficient to meet the requirements set forth in Shaffer. Because I find that in the present case Michelin Spain has sufficient contacts with this forum to satisfy the Shaffer requirements, there is no need to resolve the controversial issue of whether Shaffer contacts are required to sustain jurisdiction under Rule B(1). Compare Engineering Equipment Co. v. S.S. Selene, 446 F. Supp. 706 (S.D.N.Y. 1978) (fifth amendment's due process clause requires that defendant in Rukle B attachment proceeding have minimum contacts with the United States as a whole) with Grand Bahama Petroleum Co. v. Canadian Transp. Agencies, Ltd., 450 F. Supp. 447 (W.D.Wash. 1978) (Shaffer contacts need not be demonstrated in Rule B attachment). *fn3"

 Shaffer decided that a defendant cannot be subjected to litigation in a forum on the basis of an attachment of property there that is unrelated to the subject matter of the suit, where the defendant lacks any other significant contacts with the forum. The Court concluded that "all assertions of . . . jurisdiction must be evaluated according to the standards set forth in International Shoe and its progeny," which govern claims based upon in personam jurisdiction; 433 U.S. at 212 (citing International Shoe Co. v. Washington, 326 U.S. 310, 90 L. Ed. 95, 66 S. Ct. 154 (1945)). *fn4" As in Shaffer, the debts attached by plaintiffs in the present suit are unrelated to the damages sustained on the S/T Bunker Hill. Moreover, Michelin Spain cannot be said to have created significant contacts with this forum by putting tires on the vessel in Spain since the ultimate destination of these tires was Canada, and not New York.

 The fact that Michelin Spain has no contacts with this forum that are directly related to the present suit does not preclude a finding, however, that it satisfies International Shoe standards for some other reason. Corporations having substantial continuous contacts with a forum may be found amenable to suit for claims unrelated to the contacts on the theory that the defendant suffers no unconstitutional hardship in these circumstances by being compelled to litigate in that forum. See e.g., Perkins v. Benguet Consolidated Mining Co., 342 U.S. 437, 96 L. Ed. 485, 72 S. Ct. 413 (1952) (federal due process clause does not prevent Ohio court from exercising in personam jurisdiction over foreign corporation having continuous and systematic, but limited, business activities in Ohio, even though cause of action was unrelated to those contacts and was filed by nonresident of Ohio); Intermeat, Inc. v. American Poultry, Inc., 575 F.2d 1017, 1022-23 (2d Cir. 1978) (exercise of jurisdiction on the basis of attachment of unrelated debts held proper where defendant had "sufficient minimum contacts to make it fair and just that the foreign corporation be required to come to New York to defend the action that was begun by attachment"); Bryant v. Finnish National Airline, 15 N.Y.2d 426, 260 N.Y.S.2d 625, 208 N.E.2d 439 (1965) (upholding in personam jurisdiction in action arising out of plane crash in Europe where defendant's sole contact with New York was the maintenance of a small office to receive travel reservations for European flights); Tauza v. Susquehanna Coal Co., 220 N.Y. 259, 115 N.E. 915 (1917) (corporation engaging in substantial business with New York is amenable to suit there even for actions unrelated to these business contacts). Michelin Spain's continuous contacts with this forum are derived from its tire sales to New York. Tire sales to MTC, which are consummated with MTC's main office in this District, total approximately fifty million dollars per year, and make up roughly 30% of Michelin Spain's export sales.

 Although Judge Knapp already determined that these continuous contacts are insufficient to establish in personam jurisdiction over Michelin Spain, they nevertheless may be sufficient for purposes of in rem jurisdiction. This possibility was suggested both by the concurring opinions of Justices Powell and Stevens in Shaffer, in which they observed that quasi-in rem jurisdiction retains some independent vitality apart from in personam jurisdiction. Shaffer, supra, 433 U.S. at 217 (Powell, J. concurring) (reserving judgment "on whether the ownership of some forms of property whose situs is indisputably and permanently located within a State may, without more, provide the contacts necessary to subject a defendant to jurisdiction within the State to the extent of the value of the property); 433 U.S. at 217, 219 (Stevens, J. concurring) (reading Court's holding narrowly and suggesting the retention of quasi-in rem jurisdiction "over persons with adequate notice of both the particular controversy and the fact that their local activities might subject them to suit"). See Silberman, Shaffer v. Heitner: The End of an Era, 53 N.Y.U.L.Rev. 33, 72-77 (1978). *fn5" It is also suggested by the Second Circuit's opinion in Intermeat, supra, where the court found the minimum contacts requirements of both the attachment provisions of the N.Y. C.P.L.R. and the Due Process Clause to be satisfied for purposes of quasi-in rem jurisdiction, even though the district court had earlier found insufficient contacts to satisfy the "doing business" requirement embraced by § 301 of the N.Y. C.P.L.R. for purposes of in personam jurisdiction. 575 F.2d at 1022-23. *fn6" By attaching debts unrelated to his claim, the plaintiff in Intermeat was permitted to sue for breach of a contract that, although not entered into in New York, "had substantial connections with that State." Id. at 1023 (citing McGee v. International Life Ins. Co., 355 U.S. 220, 223, 2 L. Ed. 2d 223, 78 S. Ct. 199 (1957). Particularly relevant to the present case is the court's statement that "while [it] need not decide whether in personam jurisdiction could have attached in this case, it seems evident that the "substantial connection" of the contract with New York must be considered along with the added factor of the attachment of an intangible within the jurisdiction of the state in weighing the "minimum contacts' required for Fourteenth Amendment due process." 575 F.2d at 1023.

 Michelin Spain argues that since it has no agent in New York, it cannot be said to maintain the continuous contacts required to sustain a Shaffer-type attachment of debts unrelated to the cause of action. In so doing, it seeks to distinguish the present suit from other suits in this Circuit where Rule B(1) attachments or state attachment remedies provided via Rule B(1) were upheld because of the court's finding that the defendant's contacts with the forum were sufficient to meet due process concerns. See, e.g., Amoco Overseas Oil v. Compagnie Nationale Algerienne, 605 F.2d 648 (2d Cir. 1979) (attached debts related to matter in controversy); Adidas (Canada) Ltd. v. S.S. Seatrain Bennington, 80 Civ. 1922 (S.D.N.Y. March 14, 1983) (large sales volume through New York agent); Engineering Equipment, supra, 446 F. Supp. at 708 (forum used to further defendant's overall sales and attached debts related to subject matter of suit). *fn7" In several other respects, however, this suit is similar to Amoco and Engineering Equipment, supra, as well as other cases in which quasi-in rem jurisdiction was upheld. Based on these similarities, I find this case to be appropriate for the exercise of quasi-in rem jurisdiction.

 In Feder v. Turkish Airlines, 441 F. Supp. 1273 (S.D.N.Y. 1977), quasi-in rem jurisdiction was ;upheld in a wrongful death action against a foreign airline arising out of an accident occurring over Turkey. Jurisdiction was based on the attachment of a New York bank account voluntarily opened by the defendant, even though the account was totally unrelated to the action. The court stated that, in opening the bank accouant, the defendants had availed themselves of the forum, and thus could not claim that the filing of a suit against it was totally unforseeable. Id. at 1277-79 & 1279 n.5. See also Amoco, supra, 605 F.2d at 655 (had there been default in payment of the attached debts, the defendant might have sued on those debts in the forum); Intermeat, supra (defendant's agreement to arbitrate in the forum potential disputes arising out of other contracts deemed relevant to the "minimum contacts" test); Engineering Equipment, supra, 446 F. Supp. at 210 ("the defendants could reasonably have foreseen that litigation relating to the [attached debts] could take place in the United States"). Similarly, in this case, Michelin Spain's sales to New York, and its accumulation of credits there, were purposeful acts that rendered suit in this forum not unlikely. This is a far cry from the case in which a defendant is hailed into court on the basis of attached debts that moved into the forum through no affirmative act of his own. Compare Harris v. Balk, 198 U.S. 215, 49 L. Ed. 1023, 25 S. Ct. 625 (1905) (permitting attachment of debts temporarily and adventitiously located in the forum state, even though debt was created elsewhere).

 Two additional factors, cited by the Court in Amoco Overseas, supra, militate in favor of the assertion of jurisdiction here. First, it should be noted that in Shaffer, the defendant was readily available for suit in other states. In fact, Justice Marshall, writing for the Court, specifically excepted from the Court's holding "'the question whether the presence of a defendant's property in a state is a sufficient basis for jurisdiction when no other forum is available to the plaintiffs." 433 U.S. at 211 n.37. Here, as in Amoco, dismissal of the suit in this District may render the defendant unavailable for suit in any court in the United States. This element of "jurisdiction by necessity" was cited by the Amoco court as a factor contributing to the assertion of jurisdiction. 605 F.2d at 655. See supra n.2.

 Secondly, the Amoco Court stated that "even if the Shaffer rule of "minimum contacts," "fair play" applies in the realm of jurisdiction by attachment in admiralty . . . that application must be understood in the light of the special history and circumstances of that unique body of law." 605 F.2d at 655 n.5 (citing Grand Bahama, supra). In particular, the court cited the peripatetic nature of the defendant and the independent constitutional bases in admiralty suits as factors justifying the formulation of different jurisdictional policies for admiralty attachment. It concluded, "not only that jurisdiction by attachment of property should be accorded special deference in the admiralty context, but also that maritime actors must reasonably expect to be sued where their property may be found." *fn8"

 Overall, I conclude that Seatrain's third-party quasi-in rem action against Michelin Spain pursuant to Rule B(1) should not be dismissed. Given the level of purposeful contacts between Michelin Spain and this forum, and in consideration of the fact that there is no more appropriate forum in this country for asserting suit over Michelin Spain in this matter, I find that Shaffer's due process requirements, even if they should be applicable to maritime cases, have been fulfilled. *fn9"

 B. Forum Non Conveniens

 "The principle of forum non conveniens is simply that a court may resist imposition upon its jurisdiction even when jurisdiction is authorized by the letter of a general venue statute." Gulf Oil Corp. v. Gilbert, 330 U.S. 501, 507, 67 S. Ct. 839, 91 L. Ed. 1055 (1947). In ...


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