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U.S. v. BRASPETRO OIL

November 7, 2005.

UNITED STATES FIDELITY & GUARANTY COMPANY and AMERICAN HOME ASSURANCE, Plaintiffs,
v.
BRASPETRO OIL, et al., Defendants. UNITED STATES FIDELITY & GUARANTY COMPANY and AMERICAN HOME ASSURANCE, Plaintiffs, v. PETROLEO BRASILEIRO S.A. — PETROBRAS, et al., Defendants.



The opinion of the court was delivered by: JOHN KOELTL, District Judge

MEMORANDUM OPINION AND ORDER

Defendants Petrobras and Brasoil (collectively "Petrobras") move for reconsideration of this Court's July 23, 2005 Opinion and Order to the extent that it granted Cameron & Hornbostel's motion to fix a charging lien. Petrobras renews its arguments that the Court has no jurisdiction to fix a charging lien due to a forum selection clause in the July 2003 retainer agreement and because of the Foreign Sovereign Immunities Act ("FSIA"). In the alternative, Petrobras moves to certify the Court's Order for an interlocutory appeal pursuant to 28 U.S.C. § 1292 (b).

I.

  The standards for granting a motion for reconsideration pursuant to Local Civil Rule 6.3 are well established and are the same as those governing former Local Civil Rule 3(j). See United States v. Letscher, 83 F. Supp. 2d 367, 382 (S.D.N.Y. 1999) (collecting cases). The moving party is required to demonstrate that the Court overlooked the controlling decisions or factual matters that were put before the Court in the underlying motions. Nakano v. Jamie Sadock, Inc., 98 Civ. 0515, 2000 WL 1010825, at *1 (S.D.N.Y. July 20, 2000); Walsh v. McGee, 918 F. Supp. 107, 110 (S.D.N.Y. 1996); In re Houbigant, Inc., 914 F. Supp. 997, 1001 (S.D.N.Y. 1996). The rule is "narrowly construed and strictly applied so as to avoid repetitive arguments on issues that have been considered fully by the court." Walsh, 918 F.Supp. at 110; see also Nakano, 2000 WL 1010825, at *1; United States v. Mason Tenders Dist. Council of Greater N.Y., 909 F.Supp. 882, 889 (S.D.N.Y. 1995).

  II.

  This Court previously ruled that the forum selection clause in a retainer agreement and the FSIA did not bar fixing a charging lien pursuant to N.Y. Judiciary Law § 475. See U.S. Fidelity & Guar. Co. v. Braspetro Oil, 379 F. Supp. 2d 487 (S.D.N.Y. 2005). Petrobras now argues, as it did in resisting the lien in the original motion, that the charging lien is barred by the forum selection clause in the July 2003 Contract Between Braspertro Oil Services Company — Brasoil and Cameron & Hornbostel LLP for Provision of Specialized Legal Advisory and Consulting Services ("2003 Retainer Agreement"), which provides for jurisdiction in Brazil for "any questions arising out of this Contract." (2003 Retainer Agreement ¶ 16, attached at Ex. 2 to Motion to Withdraw as Counsel and Fix a Charging Lien.)

  In the prior Opinion and Order, the Court found that the dispute over the charging lien did not arise out of the 2003 Retainer Agreement, and therefore was not barred by the forum selection clause. Braspetro, 379 F. Supp. 2d at 489. Nothing submitted by Petrobras suggests that the Court overlooked any controlling issues of law or fact in reaching that decision, and there is a sufficient basis for rejecting the application of the forum selection clause as barring the charging lien.

  The Court previously noted that the bulk of the services performed by Cameron & Hornbostel were performed pursuant to a May 9, 1997 agreement that did not include a forum selection clause. See Ex. 1 to Motion to Withdraw as Counsel and Fix a Charging Lien. Petrobras is correct to point out that the 2003 Retainer Agreement did supercede and dissolve the May 9, 1997 agreement, and that any success fee was to be paid under the 2003 Retainer Agreement, with any prior fees paid under the May 9, 1997 agreement to be deducted from that fee. See Sections 11.4 and 15 of the 2003 Retainer Agreement. Therefore, it was error to rely on the absence of a forum selection clause in the May 9, 1997 agreement. However, that does not change the result, because the dispute over the charging lien does not arise out of the 2003 Retainer Agreement. As the Court previously explained, the charging lien is separate from the contract and arises under New York law relating to services rendered in connection with the litigation in this Court.

  III.

  Petrobras also seeks reconsideration of this Court's prior finding that there was supplemental jurisdiction to fix the charging lien, and that nothing in the FSIA barred the exercise of such jurisdiction. Braspetro, 379 F. Supp. 2d at 490. There is nothing in the motion for reconsideration that causes the Court to reconsider its prior decision.

  However, in response to the arguments raised by Petrobras, it should also be noted that this is not simply a case where Petrobras was sued in the Southern District of New York and defended itself through the retention of attorneys, as Petrobras now claims. Brasoil affirmatively asserted claims, including claims for the recovery of its attorneys' fees, and obtained a judgment of in excess of $370 million prior to an appeal that affirmed much of the judgment. In the course of the litigation, both Brasoil and Petrobras affirmatively waived any immunity under the FSIA. See Joint Pre-Trial Order §§ II (B) (1) and (2); U.S. Fidelity and Guar. Co. v. Braspetro Oil, 219 F. Supp. 2d 403, 473 (S.D.N.Y. 2002), aff'd in relevant part, 369 F.3d 34 (2d Cir. 2004). Both Brazoil and Petrobras thus explicitly subjected themselves to the jurisdiction of this Court pursuant to 28 U.S.C. § 1605(1).

  Petrobras argues that the claim for the attorneys' fees arises out of the separate and unrelated 2003 Retainer Agreement, but this argument has no basis. The statutory attorneys' fee lien arises out of the services rendered in this litigation as a matter of statute, and would have existed even without an explicit retainer agreement. See N.Y. Judiciary Law § 475.

  Finally, Petrobras argues that it could not have foreseen litigating before this Court an attorney's fee dispute in connection with the original lawsuit in light of the forum selection clause in the 2003 Retainer Agreement, and thus it did not intend to waive its sovereign immunity regarding the dispute with Cameron & Hornbostel. This argument ignores the fact that the Joint Pre-Trial Order was entered prior to the trial at a time when the original retainer agreement, which had no forum selection clause, was in effect. Petrobras cannot limit the effect of the waiver of FSIA immunity by subsequently entering the 2003 Retainer Agreement. See 28 U.S.C. § 1605(1) (noting that there is a waiver of immunity "notwithstanding any withdrawal of the ...


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