The opinion of the court was delivered by: NAOMI BUCHWALD, District Judge
On August 25, 2004, HBC Hamburg Bulk Carriers GMBH & Co. KG
("HBC" or "plaintiff"), applied ex parte for an order of
maritime attachment pursuant to Rule B of the Supplemental Rules
for Certain Admiralty and Maritime Claims ("Rule B"). HBC's
application was granted, and HBC obtained a Process of Maritime
Attachment and Garnishment ("PMAG") in the Southern District of
New York. Pursuant to this PMAG, HBC subsequently attached a
number of electronic funds transfers ("EFTs") as property of the
defendant Proteinas y Oleicos S.A. de C.V. ("Proteinas" or
"defendant"). Proteinas now moves pursuant to Supplemental Rule
E(4)(f) to vacate the HBC's attachment of the EFTs. For the
reasons set forth below, Proteinas' motion is granted in part and
denied in part. BACKGROUND*fn1
On March 8, 2004, HBC, a German leasor of shipping vessels, and
Proteinas, a Mexican corporation, entered into a maritime
contract whereas HBC agreed to provide Proteinas vessels to
transport soybeans from Brazil to Mexico. A dispute arose among
the parties, with HBC alleging that Proteinas owed it
$1,590,408.11 for breach of their maritime contract. Pursuant to
their charter contract, the parties have submitted the underlying
dispute to arbitration in London, England.
HBC filed a verified complaint on August 25, 2004 in the
Southern District of New York with a request for the issuance of
an attachment order under Rule B. In its verified complaint, HBC
alleged that Proteinas could not be found within the district,
but that Proteinas had, or would shortly have, assets located in
this district. Based on these assertions, we ordered the Clerk of
this Court to issue HBC a PMAG allowing for the attachment of
Proteinas' property within this district, up to and including the
amount in contest. On August 26, 2004 and thereafter, HBC served
the PMAG on Bank of America in New York. On September 21, 2004
and thereafter, HBC served the PMAG on Citibank in New York. Proteinas filed a general appearance in
this district on September 23, 2004.
Pursuant to the PMAG, both Citibank and Bank of America
attached a number of EFTs as property of Proteinas. These
attachments included EFTs sent by third-parties to Proteinas as
payments, and EFTs initiated after Proteinas filed its general
appearance in this district. Proteinas contends that a number of
these attachments do not conform to the requirements of Rule B.
As part of its business, Proteinas requires its customers to
pay for purchases in U.S. Dollars, deposited in Proteinas'
accounts at either Banco Del Bajio, S.A. de C.V. ("Banco Bajio")
or BBVA Bancomer Mexico ("Bancomer") in Mexico (collectively
"Proteinas' Mexican Banks"). To make payment in U.S. Dollars at
Protenias' Mexican Banks, many of Proteinas' customers must
engage in complex but commonplace international funds transfers,
primarily using EFTs to transfer funds through a number of
different banks. For the purposes of such transactions, both of
Proteinas' Mexican banks maintain bank accounts with certain U.S.
banks that act as intermediaries. In essence, all transactions in
U.S. Dollars associated with Proteinas' Mexican Banks are routed throught two U.S.
intermediaries: JP Morgan Chase Bank in New York ("JP Morgan")
for Bancomer and Bank of America NT & SA in Concord, California
("BA/Concord") (collectively "Proteinas' U.S. intermediary
banks") for Banco Bajio. If the customer is an American company,
a transfer is made from the customer's U.S. bank to one of
Proteinas' U.S. intermediary banks, and then from the
intermediary bank to Proteina's Mexican bank. If the paying
customer does not maintain a U.S. banking account, the customer's
foreign bank will transfer funds to its intermediary bank in the
United States; the customer's intermediary bank then transfers
U.S. dollars to Proteinas' U.S. intermediary bank; and finally,
Proteinas' U.S. intermediary bank transfers the funds to one of
Proteinas' Mexican banks.
The Bank of America EFTs were attached at two different
branches that played two different roles in the process outlined
above. As noted above, BA/Concord served as the intermediary bank
for Proteinas' account at Bank Bajio. As such, BA/Concord froze
two payments from customers to Proteinas, both on August 26,
2004: $53,682.21 initiated by Malta Texo de Mexico S.A. de C.V.
and $100,000.00 from Scotiabank Inverlat S. A. In addition,
BA/Concord froze two EFTs from Proteinas to third-parties as
payments on September 15, 2004 and November 1, 2004. A different Bank of America branch in Miami ("BA/Miami") served
as the primary bank for one of Proteinas' customers, Cargill de
Mexico S.A. de C.V. ("Cargill"), and processed payments from
Cargill's account to Proteinas. BA/Miami froze three EFTs
originated by Cargill to Proteinas Mexican Banks: $229,138.93
destined for Bancomer, $29,104.31 destined for Banco Bajio, and
$33,539.43 destined for Banco Bajio. BA/Miami served as Cargill's
bank in these transactions, and payment instructions were given
by Cargill to BA/Miami to transfer these funds to Proteinas'
The attached Citibank EFTS are all payments that Proteinas's
customers had sent to Proteinas for eventual deposit in its
Mexican bank accounts. In these transactions, Citibank was acting
as the either the customers' intermediary bank or the customers'
U.S. bank. On September 21*fn2 and 24 and October 8, 2004,
Citibank froze three EFTs: $36,526.90 originated by Tron Hermanos
S.A. de C.V. of Mexico; $11,968.01 originated by Cognis Corp. of
Ohio; and $342,968.43, originated by Pilgrims Pride S.A. de C.V.
of Mexico. Finally, on January 4, 2005, Citibank froze two additional transactions $501,551.26 and
$333,414.53, originated by Unilever de Mexico S. de R.L. as
payment to Proteinas' account at Bancomer.*fn3
I. Rule B of the Supplemental Rules
Rule B of the Supplemental Rules for Certain Admiralty and
Maritime Claims ("Rule B") provides a method of obtaining quasi
in rem jurisdiction over a defendant by attaching the
defendant's property within a district. Rule B reads, in part:
"If a defendant is not found within a district, a verified
complaint may contain a prayer for process to attach the
defendant's tangible or intangible personal property up to the
amount sued for in the hands of garnishees named in the
process." Fed.R.Civ.P. Supp. R. B(1)(a).
Rule B may be invoked only when three prerequisites are met.
First, the plaintiff's claim must be an "in personam claim
against the defendant which is cognizable in admiralty." Robert
M. Jarvis, An Introduction to Maritime Attachment Practice Under
Rule B, 20 J. Mar. L. & Com. 521, 526 (Oct. 1989) (hereinafter
"Jarvis"). Second, the defendant must not be "found" in the
district. Fed.R.Civ.P. Supp. R. B(1)(a). Courts have interpreted "not found" to include two requirements: that the
court does not have in personam jurisdiction over the
defendant under a minimum contacts analysis, and the defendant
cannot be served with process in the district. Jarvis, supra at
527. Finally, the property intended to be attached must be
located within the district where a PMAG is sought.
In the instant case, Proteinas challenges the attachment of
certain EFTs outside the Southern District, the attachment of any
EFTs sent by third parties ("sending-payors") to Proteinas as the
recipient-beneficiary, and the attachment of any EFTs after it
filed a general appearance. When the validity of an attachment is
challenged, the burden is on the plaintiff to show why the
attachment should not be ...