Blue Whale Corp. v. Grand China Shipping Development Co.
722 F.3d 488
2d Cir.2013Background
- Blue Whale sought Rule B attachment on HNA as alter ego of Development for about $1.3 million in New York assets.
- District court authorized attachment; later vacated it under Rule E(4)(f) after English law analysis.
- District court held English law governed alter-ego prima facie issue and found no sufficient veil-piercing facts.
- Blue Whale and White Rosebay argued federal common law governs Rule B collateral identity questions; district court split.
- Second Circuit held Rule B inquiry is mix of procedural (sound in admiralty) and substantive (prima facie validity) and remanded for reconsideration under federal common law.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Does Blue Whale's claim against HNA sound in admiralty? | Blue Whale argued it arises from a maritime contract and thus sounds in admiralty. | HNA contends choice-of-law and foreign facts may govern findings. | Yes; claim sounds in admiralty. |
| What law governs the prima facie validity of the alter-ego claim? | Substantive law should govern claims; English law per contract should apply. | Contractual choice-of-law governs substantive veil-piercing. | Substantive law governs prima facie validity; English law not controlling collateral claim. |
| Does federal common law automatically govern examining corporate identity in Rule B? | Federal common law applies to corporate identity in admiralty. | Choice-of-law provisions may govern; federal common law not automatic. | No automatic application; maritime choice-of-law analysis yields federal common law for this collateral claim. |
| What should the court do on remand? | Remain consistent with prior reasoning to ensure attachment validity. | Need reevaluation under proper federal common-law standard. | Vacate and remand for reconsideration under federal common law. |
Key Cases Cited
- Aqua Stoli Shipping Ltd. v. Gardner Smith Pty Ltd., 460 F.3d 434 (2d Cir. 2006) (established Aqua Stoli emphasis on Rule B criteria and search for prima facie claim)
- Lauritzen v. Larsen, 345 U.S. 571 (Supreme Court 1953) (multifactor maritime choice-of-law test for transaction contacts)
- Kalb, Voorhis & Co. v. American Financial Corp., 8 F.3d 130 (2d Cir. 1993) (choice-of-law clauses collateral to alter-ego analysis are irrelevant)
- Clipper Wonsild Tankers Holding A/S v. Biodiesel Ventures, LLC, 851 F. Supp. 2d 504 (S.D.N.Y. 2012) (federal common law vs. state law in admiralty identity issues when appropriate)
- Kirno Hill Corp. v. Holt, 618 F.2d 982 (2d Cir. 1980) (federal maritime law for agency-based alter-ego questions)
- Arctic Ocean Int'l Ltd. v. High Seas Shipping Ltd., 622 F. Supp. 2d 46 (S.D.N.Y. 2009) (illustrates use of federal maritime law in collateral identity disputes)