United States District Court, S.D. New York
February 6, 2004.
SENATOR LINIE GmbH & CO. KG, a/k/a SENATOR LINES, Plaintiff -against- EASTERN SUNWAY LINE, INC., SUNWAY LINE, INC., ZEN CONTINENTAL CO., INC., NATIONAL CHEMICALS IMPORT & EXPORT CORPORATION, a/k/a TIANJIN CHEMICALS IMPORT & EXPORT CORP., ACETO CORP., and ITOCHU SPECIALTY CHEMICALS, INC., Defendants
The opinion of the court was delivered by: MIRIAM CEDARBAUM, Senior District Judge Page 2
Defendant Tianjin Chemicals Import and Export Corporation ("Tianjin")
moves pursuant to Federal Rule of Civil Procedure 60(a) to amend the
judgment in this case to delete the name "National Chemicals Import and
Export Corporation" ("Sinochem") from the caption. In the alternative,
Tianjin moves to drop Sinochem as a party to the action pursuant to
Federal Rule of Civil Procedure 21. Tianjin also moves to reopen its time
to appeal under Federal Rule of Appellate Procedure 4(a)(6).
Co-defendants Zen Continental, Eastern Sunway Line, Inc., and Sunway
Line, Inc. (collectively "Zen Continental") move for sanctions. For the
following reasons, all of these motions are denied.
These are post-judgment motions in a maritime action that arose from a
fire aboard the M/V Tokyo Senator off the coast of Norfolk, Virginia in
1994. Plaintiff, the time charterer of the ship, sued defendants Tianjin
and Zen Continental, among others, under the Carriage of Goods by Sea Act
(COGSA). See Ins. Co. of N. Am. v. M/V Tokyo Senator, 95 Civ. 3303
(MGC), 96 Civ. 0008 (MGC), 2001 WL 238293, at *1 (S.D.N.Y. Mar. 9,
2001). Tianjin and Zen Continental were the shippers of 300 barrels of
thiourea dioxide (TDO) that had been loaded onto the vessel in Korea.
After a bench trial, I found, that an exothermic reaction inside the
containers of TDO caused a fire. See id. However, plaintiff failed to
prove that negligence on the part of defendants caused the fire. See id.
at *5. In addition, TDO was not known to be a hazardous chemical at the
time it was shipped. See id. at *4. Accordingly, judgment was entered for
On appeal, the Second Circuit reversed the judgment, determining as a
matter of first impression in this Circuit that COGSA establishes a rule
of strict liability for shippers of hazardous cargo, whether or not the
shippers are aware of the cargo's dangers. See Senator Linie GmbH and
Co. KG. a/k/a Senator Lines v. Sunway Line, Inc., 291 F.3d 145, 168 (2d
Upon remand, judgment was entered for Senator Lines on October 30,
2002. Zen Continental subsequently moved to amend the judgment to obtain
an award of indemnity and attorney's fees from Tianjin as the entity
principally responsible for plaintiff's damages. The motion was properly
served on Tianjin's then-counsel, Chris X. Lin, Esq. Tianjin did not file
opposition papers, appear at oral argument, or otherwise contest the
motion. An unopposed amended judgment was entered on May 30, 2003.
The motion to amend the judgment or to drop Sinochem
was denied, in a recorded oral opinion on: January 15, 2004.
Tianjin also moves to reopen its time to appeal in order to contest the
indemnity and attorney's fee award to Zen Continental. This motion must
also be denied. The Second Circuit requires a four-part showing to reopen
the time to appeal under Federal Rule of Appellate Procedure 4(a)(6): the
moving party must establish (1) that it was entitled to notice of the
entry of judgment; (2) that it did not receive notice from the clerk of
the court or from any party within 21 days of its entry; (3) that
extension would not prejudice any party; and (4) that movant sought to
reopen time to appeal within the earlier of 180 days after judgment or 7
days after movant's receipt of notice. See Avolio v. County of Suffolk,
29 F.3d 50, 52 (2d Cir. 1994).
It is not necessary to reach the conflicting affidavits offered by
Tianjin and Zen Continental with respect to the question of whether
Tianjin received notice of the entry of the judgment, because Tianjin has
failed to rebut Zen Continental's showing that extension of time to
appeal would prejudice it. Prejudice, for the purposes of Rule 4(a)(6), is
"some adverse consequences other than the cost of having to oppose the
appeal and encounter the risk of reversal, consequences that are present
in every appeal." Cordon v. Greinier, 274 F. Supp.2d 434, 441 (S.D.N.Y.
2003) (quoting the Advisory Committee Notes for Federal Rule of Appellate
4). Here, Zen Continental has shown that it has taken steps to enforce
the judgment: it has begun investigating Tianjin's U.S. subsidiaries,
retained local counsel in Florida, issued subpoenas to those
subsidiaries, and has otherwise begun to enforce the judgment. Tianjin
has not disputed these assertions.
More important than Zen's showing of prejudice, however, is the fact
that granting Tianjin's motion would be futile. Tianjin did not contest
Zen Continental's motion to amend the judgment. "It is well-settled
that, absent exceptional circumstances, a party cannot raise on appeal
legal issues not raised and considered in the trial forum." Finch v.
Hughes Aircraft Co., 926 F.2d 1574, 1576-77 (Fed. Cir. 1991) (citing
Virtue v. Creamery Package Mfg. Co., 227 U.S. 8, 38-39 (1913)). Tianjin
does not dispute that it received notice of Zen Continental's motion to
amend the judgment. Tianjin does not offer a persuasive explanation for
its failure to oppose Zen Continental's motion in the district court.
Essentially, by failing without excuse to oppose the motion, Tianjin
waived its opposition to the award of indemnity and attorney's fees.
Accordingly, the motion to reopen time to appeal is denied.
Zen Continental seeks sanctions, including attorneys' fees, under
Federal Rule of Civil Procedure 11, 28 U.S.C. § 1927, and New York
Judiciary Law § 487. Zen Continental argues that Tianjin made
misrepresentations in its motion papers and
affidavits and that the sole purpose of the motion is to delay
enforcement of the amended judgment and increase the expenses of its
It appears that Zen Continental did not follow Rule 11's procedural
requirements. Tianjin filed its motion November 26, 2003, and Zen
Continental filed its "cross-motion" with the court on December 10. A
party moving under Rule 11 is required to serve the motion on the
respondent at least 21 days before filing it with the court. See
As for Zen Continental's request for sanctions under 28 U.S.C. § 1927,
the Second Circuit has held that "an award under § 1927 is proper when
the attorney's actions are so completely without merit as to require the
conclusion that they must have been undertaken for some improper purpose
such as delay." United States v. Int'l Broth, of Teamsters, 948 F.2d 1338,
1345 (2d Cir. 1991) (quoting Oliveri v. Thompson, 802 F.2d 1265, 1273 (2d
Cir. 1986)). "Bad faith is the touchstone of an award under this
statute." Id. The activities in question are not so obviously the product
of bad faith. Therefore, Zen Continental's motion for these sanctions is
For the foregoing reasons, Tianjin's motions to alter the judgment,
strike Sinochem as a party, and reopen time to appeal are denied. Zen
Continental's motion for sanctions is also denied.