199 F. Supp. 3d 1102
E.D. La.2016Background
- Multiple creditors (Stemcor, Daewoo, TKM, ABN AMRO, Clipper, others) asserted claims against AMT and COSI-PAR and sought attachment of 9,000 metric tons of pig iron aboard M/V CLIPPER KASASHIO as security.
- Stemcor and Daewoo filed in federal court on Dec. 14, 2012 and obtained Rule B maritime attachments (served Dec. 22). Daewoo also obtained a federal-state-law attachment on Dec. 22 invoking the Convention.
- TKM filed in the 24th JDC for Jefferson Parish on Dec. 28–29 and the Jefferson Parish Sheriff served state-court seizure papers Dec. 29 at 7:52 a.m.
- The U.S. Marshals served a federal Rule C arrest and additional federal attachments on Dec. 29 at 8:00 a.m., eight minutes after the state seizure. The cargo was later sold and proceeds deposited in the federal court registry pursuant to an interlocutory-sale order.
- TKM moved to vacate all federal maritime and state-law attachments as void for lack of federal subject-matter jurisdiction and to transfer the sale proceeds to the 24th JDC. The Court granted TKM’s motion.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the Stemcor/Daewoo contracts give rise to admiralty jurisdiction permitting Rule B maritime attachment | TKM: contracts are commodity sales, non-maritime; Rule B attachments void | Stemcor/Daewoo: contracts involve maritime transportation and fall under Kirby or mixed-contract doctrines | Court: Contracts are non-maritime sales; Rule B attachments vacated for lack of admiralty jurisdiction |
| Whether the Convention (Chapter Two FAA) gives federal jurisdiction over Daewoo’s suit to compel arbitration and to obtain provisional remedies | Daewoo: Convention applies (written arbitration agreement, commercial, U.S. seat), so federal jurisdiction exists and provisional remedies in aid of arbitration are available | TKM: Daewoo failed to allege it was “aggrieved”; Convention does not authorize attachment; Louisiana law forbids attachment in aid of arbitration | Court: Convention confers federal jurisdiction; provisional remedies in aid of arbitration are permissible under the Convention and Rule 64, but state attachment statute limits still apply |
| Whether Louisiana’s non-resident attachment statute (art. 3541/3542) authorizes attachment pending arbitration | TKM: Louisiana law does not permit attachment in aid of arbitration; Daewoo’s petition is not an "action for money judgment" | Daewoo: compelling arbitration is functionally like a money-judgment action and attachments should be allowed to secure potential awards | Court: Daewoo’s petition is not an ‘‘action for a money judgment’’ under Louisiana law; Louisiana does not authorize pre‑arbitration attachment here; Daewoo’s state-law attachment vacated |
| Whether the 24th JDC’s seizure (Dec. 29, 7:52 a.m.) gained prior exclusive jurisdiction over the res, making subsequent federal attachments void and requiring transfer of sale proceeds to state court | TKM: federal attachments were invalid so the state seizure was first valid seizure; prior exclusive jurisdiction requires federal court to yield and transfer proceeds | Defs: federal suits were filed earlier; initial federal seizure papers had legal effect; vessel’s departure/sale and deposit in federal registry divested state court | Court: State sheriff’s valid seizure on Dec. 29 established first valid quasi in rem control; prior exclusive jurisdiction bars federal in rem/quasi in rem jurisdiction thereafter; federal post‑seizure attachments vacated and proceeds transferred to 24th JDC |
Key Cases Cited
- Marshall v. Marshall, 547 U.S. 293 (U.S. 2006) (prior exclusive jurisdiction principle between courts asserting in rem jurisdiction)
- Penn Gen. Cas. Co. v. Commonwealth of Pennsylvania ex rel. Schnader, 294 U.S. 189 (U.S. 1935) (first in rem court must yield to prior in rem jurisdiction; timing/possession critical)
- Norfolk S. Ry. Co. v. Kirby, 543 U.S. 14 (U.S. 2004) (when a contract is essentially maritime, admiralty jurisdiction may attach — through-bill-of-lading context)
- Alphamate Commodity GMBH v. CHS Europe SA, 627 F.3d 183 (5th Cir. 2010) (Rule B attachments require admiralty jurisdiction; mixed-contract analysis and limits)
- Lucky-Goldstar Int’l (Am.) Inc. v. Phibro Energy Int’l, Ltd., 958 F.2d 58 (5th Cir. 1992) (sale-of-goods requiring shipment by sea is not necessarily maritime)
- E.A.S.T., Inc. of Stamford, Conn. v. M/V Alaia, 876 F.2d 1168 (5th Cir. 1989) (Convention/FAA does not necessarily bar provisional maritime remedies in aid of arbitration)
- McCreary Tire & Rubber Co. v. CEAT S.p.A., 501 F.2d 1032 (3d Cir. 1974) (holding provisional attachments may be inconsistent with arbitration agreement — court distinguishes and declines to follow here)
- Simula, Inc. v. Autoliv, Inc., 175 F.3d 716 (9th Cir. 1999) (restrictive view on courts granting provisional relief when arbitrators can grant interim relief)
- Borden, Inc. v. Meiji Milk Products Co., 919 F.2d 822 (2d Cir. 1990) (Convention permits courts to grant provisional relief in aid of arbitration)
- Freeman v. Howe, 65 U.S. (24 How.) 450 (U.S. 1860) (valid seizure and actual control of res required for in rem jurisdiction)
- Wabash R.R. Co. v. Adelbert Coll., 208 U.S. 38 (U.S. 1908) (possession by appropriate proceedings withdraws property from other courts' jurisdiction)