Motion seeking a stay pursuant to Federal Rule of Appellate Procedure 8(a), and appeal of the December 10, 2008 order of the United States District Court for the Southern District of New York (Daniels, J.), vacating the ex parte Process of Maritime Attachment and Garnishment obtained by Plaintiff-Appellant.
THE MOTION IS DENIED AND THE DISTRICT COURT ORDER IS AFFIRMED.
Argued: February 13, 2009
Before: WALKER, CALABRESI, and WESLEY, Circuit Judges.
Plaintiff-Appellant STX Panocean (UK) Co., Ltd. ("STX") appeals from and seeks a stay, pursuant to Federal Rule of Appellate Procedure 8(a), of the December 10, 2008 order of the United States District Court for the Southern District of New York (Daniels, J.) vacating the ex parte Process of Maritime Attachment and Garnishment obtained by STX in the amount of $900,000 against Glory Wealth Shipping Pte Ltd. ("Glory Wealth") and Glory Wealth Shipping Service Ltd. ("Glory Service") (collectively, the "Defendants"). We find that registration with the New York Department of State, pursuant to New York Business Corporation Law § 1304, to conduct business in New York and designation of an agent within the district upon whom process may be served constitutes being "found" within the district for purposes of Rule B of the Supplemental Rules for Admiralty or Maritime Claims and Asset Forfeiture Actions. We therefore affirm the district court's vacatur of the maritime attachment and dismiss the motion for a stay as moot.
In November 2008, STX filed a complaint against Defendants, alleging that Glory Wealth agreed to charter one of its vessels, but then failed to produce the required hire payment for a fifteen-day period, and that Glory Service served as guarantor of Glory Wealth's performance. The district court issued an ex parte order pursuant to Rule B of the Supplemental Rules of Certain Admiralty and Maritime Claims granting an attachment against Glory Wealth in the amount of $900,000. See STX Panocean (UK) Co., Ltd. v. Glory Wealth Shipping Pte Ltd., No. 08-CV-9762 (GBD) (S.D.N.Y. Nov. 13, 2008) (Ex Parte Order).
The Defendants responded with a letter motion to vacate the attachment. The Defendants argued that they were not subject to a Rule B attachment because they had registered with the New York Department of State and therefore could be "found" in New York for Rule B purposes.
On December 10, 2008, the district court conducted a hearing to assess whether Glory Wealth in fact met Rule B's requirements. At the conclusion of the hearing, the district court vacated the attachment, finding that "[i]n the absence of a clear statement by the Second Circuit to the contrary," the court agreed with the sizable majority of Southern District judges who concluded "that the requirements [for a finding that the defendant is] found in this district are not a set of greater requirements than [those required to exercise] personal jurisdiction over the defendant[s] in this case." Id. (Hr'g Tr.) 27. The district court also noted that if STX won an arbitration award, it could return to the Southern District to satisfy that judgment against the Defendants. Id. at 28. STX-UK reiterated its request for a stay of the vacatur pending the outcome of the appeal before this court of Centauri Shipping Ltd. v. W. Bulk Carriers KS, 528 F. Supp. 2d 186 (S.D.N.Y. 2007), appeal docketed, No. 07-4193-cv (2d Cir. Sept. 18, 2007). The district court denied the application. Id. at 29-30. The district court explained that "the balance of hardships doesn't weigh towards a stay" where the attachment affected a significant amount of funds that were intended to flow to other parties. STX Panocean, No. 08-CV-9762 (Hr'g Tr.) 29-30. The district court added that "there's no reason to believe that, if appropriate, future funds can't be attached in further support of an arbitration award," particularly where it was unclear whether STX-UK had even filed for arbitration. Id. at 30. On December 16, 2008, STX filed a timely notice of appeal.
On December 18, 2008, STX filed a motion for a stay of execution of the order vacating the attachment. The applications judge granted a temporary stay pending this Court's hearing of that motion.
Because this is an issue of frequent occurrence in this circuit, see, e.g., Marimed Shipping, Inc. v. Persian Gulf Shipping Co., 567 F. Supp. 2d 524 (S.D.N.Y. 2008); Pioneer Navigation Ltd. v. Stx Pan Ocean (U.K.) Co., 08 Civ. 10490 (JGK); Minmetals Shipping & Forwarding Co. v. HBC Hamburg Bulk Carriers GmbH & Co., No. 08 Civ. 3533 (RWS), 2008 U.S. Dist. LEXIS 48639 (S.D.N.Y. Jun. 24, 2008); Carolina Shipping, Ltd. v. Renaissance Ins. Group, No. 08 Civ 4711 (BSJ), 2008 U.S. Dist. Lexis 104432 (S.D.N.Y. Jun. 10, 2008), appeal docketed, No. 08-3142-cv (2d Cir. Jun. 24, 2008); Centauri, 528 F. Supp. 2d at 186, and disposition of the motion requires analysis of the merits of the underlying appeal, we consolidated the motion and underlying appeal to resolve the merits of plaintiff's claim for an attachment. The parties were instructed to brief the substance of the appeal as well as the motion.
This Court, in its discretion, may issue a stay pending appeal under Rule 8(a) of the Supplemental Rules for Admiralty or Maritime Claims and Asset Forfeiture Actions. A factor to be considered in granting a stay is whether the movant has demonstrated "a strong showing that he is likely to succeed on the merits." McCue v. City of New York (In re World Trade Ctr. Disaster Site Litig.), 503 F.3d ...