Hovensa L.L.C. v. Kristensons-Petroleum, Inc.
1:12-cv-05706
| S.D.N.Y. | Apr 26, 2013Background
- Hovensa sued KPI in New Jersey federal court for $242,121 for bunkers delivered to the Vessel, later transferred to this court under 28 U.S.C. § 1404(a] to enable third-party impleader.
- KPI filed a Third-Party Complaint against OOSA seeking $243,851.04 for non-payment of OOSA’s contract.
- OOSA moved to dismiss the Third-Party Complaint for lack of personal jurisdiction under Rule 12(b)(2) or for failure to join an indispensable party under Rule 12(b)(7).
- The Vessel is foreign-flagged; Annamar and Chemnav are not parties; the relevant entities are Hovensa (USVI LLC), KPI (Delaware), and OOSA (Panamanian/Greece).
- The chain of agreements for provisioning the Vessel began with Chemnav engaging OOSA, which ordered from KPI, which ordered from Hovensa; delivery occurred on November 27, 2011, with invoices issued and unpaid by OOSA and KPI.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether KPI can subject OOSA to New York jurisdiction | KPI. | OOSA has no NY contacts; KPI argues KPI Terms create NY jurisdiction. | No personal jurisdiction over OOSA in NY. |
| Interpretation of KPI Terms Article 12(c) to confer NY jurisdiction | Article 12(c) unconditionally conveys NY jurisdiction. | Article 12(c) read together with article 12(d) indicates venue in NY only for certain arbitration-related proceedings and is conditioned on service of process. | Article 12(c) does not unconditionally consent to NY jurisdiction for KPI against OOSA. |
| Effect of OOSA Terms on jurisdiction | OOSA Terms show consent to US federal court jurisdiction. | OOSA Terms bind Chemnav/OOSA, not KPI; consent to NY jurisdiction not applicable to KPI’s suit. | OOSA Terms do not bind KPI to NY jurisdiction. |
| Venue and forum for litigation | New York or other forum per contract. | No NY connection; case should stay where commenced or be transferred. | Grant of dismissal and transfer back to District of New Jersey under §1404. |
Key Cases Cited
- Exxon Corp. v. Central Gulf Lines, Inc., 500 U.S. 603 (1991) (maritime contract in admiralty context; venue and jurisdiction principles discussed)
- Norfolk Southern Ry. Co. v. Kirby, 543 U.S. 14 (2004) (forum-selection and jurisdiction considerations in transportation contracts)
- M/S Bremen v. Zapata Off-Shore Co., 407 U.S. 1 (1972) (priority of forum selection and attachment procedures in maritime cases)
- John Boutari and Son, Wines and Spirits, S.A. v. Attiki Importers and Distributors Inc., 22 F.3d 51 (2d Cir. 1994) (interpretation of forum selection clauses and consent to jurisdiction)
- Phillips v. Audio Active Ltd., 494 F.3d 378 (2d Cir. 2007) (contractual forum-selection clauses and minimal contacts standard)
- Ziegler v. Rieff, 637 F. Supp. 675 (S.D.N.Y. 1986) (principles on service, attachment, and jurisdiction in admiralty)
- D.H. Blair & Co., Inc. v. Gottdiener, 462 F.3d 95 (2d Cir. 2006) (jurisdictional discovery and evidentiary challenges)
- State Trading Corp. of India, Ltd. v. Assuranceforeningen Skuld, 921 F.2d 409 (2d Cir. 1990) (choice-of-law and jurisdiction considerations in maritime/arbitration contexts)
- Finansal Kiralama A.S. v. Aqua Marine and Trading Inc., 697 F.3d 59 (2d Cir. 2012) (maritime contracts and federal choice-of-law framework)