United States District Court, S.D. New York
Don P. Murnane, Jr., Manuel A. Molina, FREEHILL HOGAN & MAHAR, LLP, for Plaintiff Alaska Reefer Management LLC.
Martin F. Casey, CASEY & BARNETT, LLC, for Defendant Network Shipping Limited.
OPINION & ORDER
JOHN F. KEENAN, District Judge.
Before the Court is Defendant Network Shipping Limited's motion to vacate the Rule B attachment entered in this matter on May 20, 2014. For the reasons that follow, Defendant's motion is denied and the attachment will remain in effect. This Opinion contains no ruling on Defendant's motion for countersecurity, which has not yet been fully briefed.
Plaintiff Alaska Reefer Management LLC is organized under Washington law, and has its principal place of business in Seattle. Plaintiff alleges that Defendant Network Shipping is a Bermuda entity with an office in Coral Gables, Florida. On March 15, 2013, Plaintiff chartered two vessels owned by Defendant, the M/V Marbella Carrier and the M/V Murcia Carrier, for the purpose of transporting frozen fish from Alaska to Canada, Germany, and the Netherlands. Defendant delivered the Marbella and the Murcia into Plaintiff's service in Hong Kong on March 17 and March 23, respectively, and they each left for Dutch Harbor, Alaska. (Compl. ¶¶ 2-5, 29-30.)
Plaintiff alleges that both vessels developed engine problems and other mechanical failures that caused myriad delays, lost cargo capacity, various expenses, and loss of business. Plaintiff claims that it incurred damages of over $1.65 million plus interest as to the Marbella, and over $830, 000 plus interest as to the Murcia. The charter agreement between the parties specifies that disputes be referred to arbitration in London, which Plaintiff did. That process is ongoing. (Id. ¶¶ 6-49.)
Plaintiff initiated the instant action for the purposes of securing Defendant's assets under Rule B of the Supplemental Rules of Certain Admiralty and Maritime Claims ("Rule B"). Plaintiff made an ex parte Rule B application for the attachment of $3, 290, 287.38, which is the sum of its estimated damages, interest, and attorney's fees. This Court granted the application on May 20, 2014, and Defendant moved to vacate the attachment one week later. A hearing on the matter was held on June 5, 2014.
A. Rule B Legal Standard
Rule B states, in pertinent part, that "[i]f a defendant is not found within the district when a verified complaint praying for attachment and the affidavit required by Rule B(1)(b) are filed, 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." Fed.R.Civ.P. Supp. Rule B(1)(a). The rule is a modern extension of the "ancient practice" of maritime attachment, which historically served to "relieve a plaintiff of the burden of scouring the globe to find a proper forum for suit." Aurora Mar. Co. v. Abdulla Mohamed Fahem & Co. , 85 F.3d 44, 47-48 (2d Cir. 1996); Swiss Marine Servs. S.A. v. Louis Dreyfus Energy Servs. L.P. , 598 F.Supp.2d 414, 422 (S.D.N.Y. 2008).
The supplemental admiralty rules further provide that a party with an interest in property that has been attached under Rule B is entitled to a prompt hearing to determine whether the attachment should be vacated. See Fed.R.Civ.P. Supp. Rule E(4)(f). Upon a defendant's motion to vacate a Rule B attachment, the plaintiff must show "that (1) the plaintiff has a valid prima facie admiralty claim against the defendant; (2) the defendant cannot be found within the district; (3) the defendant's property may be found within the district; and (4) there is no statutory or maritime bar to the attachment." See Aqua Stoli Shipping Ltd., v. Gardner Smith Pty Ltd. , 460 F.3d 434, 445 (2d Cir. 2006), abrogated on other grounds by Shipping Corp. of India v. Jaldhi Overseas Pte Ltd. , 585 F.3d 58 (2d Cir. 2009); see also British Marine PLC v. Aavanti Shipping & Chartering Ltd., No. 13 Civ. 839, 2013 WL 6092821, at *2 (E.D.N.Y. Nov. 19, 2013).
The Second Circuit has also stated that vacatur is appropriate where a defendant shows that it is subject to suit in a convenient adjacent jurisdiction. Aqua Stoli , 460 F.3d at 445 & n.5 (noting that defendant bears this burden). Accordingly, courts in this district have vacated Rule B attachments where the defendant was subject to suit in such jurisdictions as the Eastern District, the District of Connecticut, and the District of New Jersey. Id. at 444; Swiss Marine Servs. , 598 ...