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United States District Court, S.D. New York

February 6, 2004.


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. Page 3

  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 defendants.

  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 Cir. 2002).

  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 Page 4 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 Procedure Page 5 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 Page 6 affidavits and that the sole purpose of the motion is to delay enforcement of the amended judgment and increase the expenses of its adversaries.

  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 F.R.C.P. 11.

  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 also denied.*fn1 Page 7


  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.


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