United States District Court, S.D. New York
Peter Skoufalos, Patrick R. O'Mea, BROWN GAVALAS & FROMM LLP, Attorneys for Plaintiff.
Brian P. R. Eisenhower, HILL RIVKINS LLP, Attorneys for Defendants.
MIRIAM GOLDMAN CEDARBAUM, District Judge.
Mediterranean Shipping Company S.A. ("MSC") brings this action for indemnity and fraud against defendants Ningbo Toptrade Import Export Co. Ltd. ("Ningbo"), Toptrade Recycling (USA), Inc., and Newdeh Lee based on an alleged attempt to steal a cargo of copper cathodes shipped by MSC from South Africa to China. MSC previously obtained a Rule B order of attachment from this Court against Ningbo, pursuant to which the Bank of New York Mellon attached a Ningbo-originated wire transfer of funds. MSC later enforced in this Court an English court judgment against Ningbo regarding the incident.
Ningbo appealed. The Second Circuit vacated that judgment and remanded with instructions to 1) state if admiralty jurisdiction exists over the suit and 2) decide the fate of the attached funds given a subsequent, unrelated decision, Shipping Corp. of India Ltd. v. Jaldhi Overseas Pte Ltd., 585 F.3d 58 (2d Cir. 2009), which held that electronic fund transfers being processed by an intermediary bank in New York were not subject to Rule B attachment.
This opinion lays out the basis for jurisdiction. After additional briefing, the second question will be answered separately.
MSC is a Swiss shipping company involved in the shipment of goods throughout the world. In order for MSC to transport cargo, the shipping merchant electronically sends MSC shipping instructions. The shipping instructions include information regarding the vessel name, beginning port, ending port, consignee, and containers holding the cargo. MSC uses this information to create a bill of lading. An MSC employee uses the bill of lading to input the shipping information into the MSC computer system. The system then generates a cargo manifest for the vessel (reflecting the shipping information) that is sent to customs in South Africa and to MSC agents at the destination port. Once the vessel sails and the shipper pays its dues, an MSC employee signs three "original" copies of the bill of lading and gives them to the shipper. Several other copies of the bill of lading are placed in MSC's records. The bill of lading acts as the shipper's receipt: it is presented to MSC agents at the destination port in order to release the cargo.
In September 2005, MSC was hired to transport eighteen containers of copper cathodes from Durban, South Africa, to Shanghai, China aboard its vessel, the MSC Amsterdam. MSC issued a bill of lading numbered 065539 for the cargo. The cargo arrived in Shanghai in late October 2005. Ningbo presented a bill of lading numbered 065539 for the cargo at the port. That bill of lading listed Ningbo as the consignee (the buyer), which matched the cargo manifest received by MSC's agents in Shanghai. Before Shanghai customs finished processing the cargo for release to Ningbo, however, an entity called Shanghai HMC presented a second bill of lading also numbered 065539 for the cargo. The customs officials then refused to release the cargo to either party.
The copies of the bill of lading retained in MSC's files in Durban reflect the information on Shanghai HMC's bill of lading, not the information on Ningbo's bill of lading or on the manifest. MSC asserts that Ningbo must have falsified a bill of lading on MSC letterhead and somehow altered the data in MSC's computer system (thus altering the manifest).
Shanghai HMC subsequently sued MSC in the English High Court of Justice for breach of a contract of carriage, obtaining judgment against MSC in April 2007. MSC then sued the defendants from this action and other parties in English court for the losses suffered in the Shanghai HMC action. The English court entered judgment against Ningbo in October 2008.
STANDARD OF REVIEW
The plaintiff bears the burden of proving subject-matter jurisdiction by a preponderance of the evidence. Aurecchione v. Schoolman Transp. Sys., Inc., 426 F.3d 635, 638 (2d Cir. 2005). In determining whether subject-matter jurisdiction exists, courts must "constru[e] all ambiguities and draw all inferences in a plaintiff's favor." Id . Affidavits and other materials outside the pleadings may be considered in making the ...