Kite Shipping LLC v. San Juan Navigation Corporation
Filing
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ORDER Adopting the magistrates judge's 56 AMENDED ORDER Vacating Attachment without prejudice. The Court Stays the vacation of the attachment until 9/30/2012; Denying 33 International Materials Inc.'s Motion for Leave to Intervene. P laintiff may file a motion for reconsideration before this Court on or before 8/22/2012. Any opposition shall be filed on or before 8/29/2012. A reply may be filed by 9/5/2012. The Court will hear oral argument on any such motion for reconsideration on 9/12/2012 at 4:00 PM before Judge Barry Ted Moskowitz. Signed by Judge Barry Ted Moskowitz on 7/11/2012. (rlu)
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UNITED STATES DISTRICT COURT
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SOUTHERN DISTRICT OF CALIFORNIA
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KITE SHIPPING LLC,
Case No. 11cv02694 BTM (WVG)
Plaintiff,
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ORDER ADOPTING MAGISTRATE
JUDGE’S ORDER VACATING
ATTACHMENT AND DENYING
INTERNATIONAL MATERIALS
INC.’S MOTION FOR LEAVE TO
INTERVENE
v.
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SAN JUAN NAVIGATION
CORPORATION AND MANDARIN
SHIPPING PTE LTD.,
Defendants.
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CARDINAL SHIPPING LLC,
Intervening Plaintiff,
v.
SAN JUAN NAVIGATION
CORPORATION AND MANDARIN
SHIPPING PTE LTD.,
Defendants.
INTERNATIONAL MATERIALS INC.,
Intervenor.
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Pending before the Court is Plaintiffs’ Objections and Application for Review of the
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Magistrate Judge’s Order Vacating Attachment (Doc. 57). For the reasons set forth herein,
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the Court adopts Magistrate Judge Gallo’s order, but stays the order pending further
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proceedings before this Court. Also pending before the Court is International Materials Inc.’s
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11cv02694 BTM (WVG)
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Motion for Leave to Intervene (Doc. 33). The Court denies this motion.
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BACKGROUND
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The following overview of the facts in this case proceeds in two parts. The first part
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reviews the facts leading up to Plaintiffs’ request for a writ of attachment. The second part
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reviews events occurring after the commencement of this lawsuit, up through the entry of
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Magistrate Judge Gallo’s March 26, 2012 order vacating the attachment.
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a.
Events leading up to the present action
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Plaintiff Kite Shipping LLC (“Kite Shipping”) is the owner of the M/V Kite, a vessel (the
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“Kite”). Plaintiff chartered the Kite to Defendant San Juan Navigation Corporation (“SJN”),
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pursuant to a 2006 time charter party agreement. Plaintiff alleges that in 2010, during the
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term of its 2006 agreement, SJN caused damage to the Vessel’s engines, resulting in
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financial losses to Plaintiff. Plaintiff has commenced arbitration in London, claiming roughly
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$1.25 million in damages to the engine, wrongfully withheld hire payments, estimated interest
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on the principal claim, and estimated attorneys’ fees. The action before this Court is an
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ancillary proceeding brought to attach and garnish assets of SJN in aid of the London
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arbitration.
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In March of 2011, SJN chartered the M/V Mandarin Fortune (the “Mandarin Fortune”),
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a vessel owned by Mandarin Fortune Shipping PTE (“MFS”) (now a defendant in this action).
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Subsequently, SJN sub-chartered the Mandarin Fortune to International Materials Inc. (“IMI”)
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(now a putative intervenor in this action). The Mandarin Fortune was scheduled to arrive at
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the Port of San Diego on November 19, 2011 (during the period of IMI’s subcharter of that
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vessel from SJN). On November 17, 2011, Plaintiff Kite Shipping commenced the present
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action, seeking to attach all of SJN’s property located on the Mandarin Fortune (or payment
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therefore) pursuant to Rule B of the Supplemental Rules for Admiralty or Maritime Claims
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11cv02694 BTM (WVG)
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and Asset Forfeiture Actions (“Rule B”). SJN’s property on the Kite consisted mainly of
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bunker fuel (“bunkers”).
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b.
Overview of present litigation
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On November 17, 2011, Magistrate Judge Gallo ordered the Clerk to issue process
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directing the United States Marshal to attach all bunkers on board the Mandarin Fortune
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belonging to SJN and garnish all other tangible and intangible property on board under the
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custody or control of SJN, its sub-charterers, or its agents (Doc. 5).
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On November 18, 2011, Cardinal Shipping Limited (“Cardinal”) moved for leave to
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intervene as a matter of right (Docs. 7 and 8).
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$172,787.58 in unpaid hire pursuant to a charter party entered between Cardinal and SJN
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in 2009, that the dispute between Cardinal and SJN had been submitted to arbitration in
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London, and that the disposition of this matter absent Cardinal would impair Cardinal’s ability
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to satisfy its claim against SJN. Magistrate Judge Gallo entered orders that day permitting
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Cardinal to intervene (Doc. 10) and authorizing issuance of process of maritime attachment
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and garnishment for the benefit of Cardinal (Doc. 12). Cardinal is now a plaintiff in this
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action.
Cardinal claimed that SJN owed it
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The Mandarine Fortune did not arrive at the Port of San Diego on November 19, 2011,
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as scheduled. Rather, it loitered off the California Coast from November 18, 2011, until the
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morning of November 21, 2011, at which time it arrived at port and the United States Marshal
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executed service. See Doc. 15 (certificate of service dated 21 November 2011); Doc. 21,
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Ex. 2 (emails dated 18-20 November 2011). On that same day, Plaintiffs and MFS entered
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into an agreement pursuant to which MFS placed $300,000 into an escrow account to secure
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the release of the bunkers onboard the Mandarin Fortune. See Pl. Br. (Doc. 57) at 2, Def.
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Br. (Doc. 58) at 1 n.1.
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On December 9, 2011, MFS moved for an order to vacate the attachment (Doc. 17),
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arguing that at the time of service of the writ of attachment, SJN was neither the owner nor
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possessor of the attached bunkers. With respect to ownership, MFS stated that SJN ordered
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the bunkers on October 10, 2011, for an agreed purchase price of $609,982.58. On
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November 11, 2011, SJN notified MFS by letter that it was going out of business and was
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ceasing operations immediately. See Doc. 17-3, Ex. 3 (Letter dated 11 November 2011).
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The letter attempted to arrange a novation pursuant to which IMI, the current “voyage
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charterer” of the Mandarin Fortune (pursuant to a sub-charter agreement with SJN), could
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substitute in for SJN as the direct charterer of the vessel. The letter also assigned to MFS
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all interests in the bunkers on board the vessel, as well as the balance owed to SJN by IMI.
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(Id.) On November 17, 2011, MFS paid the entire invoice amount of $609,982.58 on the
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bunkers. See Doc. 17-3, Ex. 4 (Invoice dated 17 November 2011). Thus, according to MFS,
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by November 21, 2011, MFS owned all the bunkers onboard the Mandarin Fortune. With
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respect to possession of the bunkers, MFS stated that it terminated its time charter with SJN
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on November 20, 2011, and therefore SJN neither owned nor possessed the bunkers at the
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time of service. See Doc. 17-3, Ex. 3 (Email dated 20 November 2011).
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Plaintiffs Kite Shipping and Cardinal (collectively, “Plaintiffs”) filed their opposition to
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the motion to vacate (Doc. 20) on January 6, 2012. In addition to arguing against the
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evidence showing that MFS--not SJN--owned the bunkers, Plaintiffs contended that MFS and
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SJN are alter egos. Plaintiffs supported their alter ego theory with allegations that: (a) MFS
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payed for the bunkers on SJN’s behalf; (b) there is no formal agreement memorializing the
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transfer of possession of the bunkers from SJN to MFS; and (c) MFS ordered the Mandarin
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Fortune to loiter off the California coast between November 18 and November 20, 2011,
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presumably because SJN had warned MFS of the order of attachment and MFS wanted to
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terminate the charter party with SJN before bringing the Mandarin Fortune into the Port of
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San Diego. (Doc. 20 at 9-10.) Plaintiffs also sought broad jurisdictional discovery on their
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alter ego theory.1
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Specifically, Plaintiffs requested: “(i) correspondence exchanged between MFS and
SJN, from the beginning of the time charter until the time of the purported termination of
same; (ii) any and all agreements entered into between MFS and SJN from January 1, 2010
to present; (iii) correspondence exchanged between SJN and the voyage charterer of the
M/V MANDARIN FORTUNE, International Materials Inc., from the beginning of the time
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On January 10, 2012, before MFS filed its reply, Plaintiffs filed their Amended Verified
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Complaint (Doc. 25), in which they repeated their allegation that “at all material times, there
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existed such unity of ownership and interest between Defendant SJN and Defendant MFS,
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that no separation exists between them . . . .” (Doc. 25 at ¶ 37.) In addition to the factual
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allegations contained in their opposition to the motion to vacate, Plaintiff’s alleged in the
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Amended Verified Complaint that SJN directed IMI (the sub-charterer) to pay to MFS all hire
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payments owed to SJN for the sub-charter of the Mandarin Fortune (totaling $77,630.97).
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(Id. at ¶ 40.)
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In its reply brief (Doc. 30), filed January 13, 2012, MFS endeavored to shed light on
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Plaintiffs’ factual allegations underlying its alter ego theory. MFS first claimed that it paid the
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entire invoice on the bunkers ordered by SJN because: (a) pursuant to the terms and
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conditions of the sale of the bunkers, any bunkers ordered by a charterer are deemed
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ordered on behalf of the owner (MFS); and (b) MFS was listed (along with SJN) as a “Buyer”
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on the confirmation of sale. Thus, MFS paid the invoice to avoid incurring liability for
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nonpayment; not, as Plaintiffs claim, on behalf of SJN. Second, MFS claimed that under
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English law (which governs the contractual relationship between MFS and SJN), the
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November 11, 2011 letter from SJN to MFS sufficed to effectuate the transfer of the bunkers
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to MFS; no formal agreement or novation was otherwise required. Third, MFS attempted to
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debunk the theory that the Mandarin Fortune delayed entry into the Port of San Diego to
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avoid the attachment, stating that it entered port with the knowledge that the bunkers would
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be attached, and that in fact it had already entered negotiations with Plaintiffs’ counsel
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regarding the $300,000 security payment. Lastly, MFS explained that the hire payments
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owed by IMI (as sub-charterer) to SJN (as charterer) now rightfully belong to MFS, since the
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charter party between SJN and MFS grants MFS (as “owners”) a lien on any amounts owed
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by a sub-charterer to SJN for use of the Mandarin Fortune.
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charter until the time of the purported termination of same; (iv) correspondence exchanged
between MFS and SJN, and the bunker supplier, Trans-Tec, in connection with the purchase
of the bunkers at issue; and (v) Vessel records indicating the amount of bunkers onboard
during the relevant time period, and the amount of bunkers consumed.” (Doc. 20 at 10-11.)
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Magistrate Judge Gallo held a hearing on the motion to vacate on January 25, 2012,
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at which Plaintiffs, for the first time, presented certain documents allegedly showing a
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connection between MFS, SJN, and MFS’s parent company, Dasin Holdings Pte. Ltd.
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(“Dasin”). The documents introduced by Plaintiffs show that MFS, Dasin, and an entity called
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San Juan Navigation (Singapore) Pte. Ltd. (“SJN (Singapore)”) shared a registered corporate
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address and certain agents and officers. Magistrate Judge Gallo permitted MFS to respond
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in writing. On February 21, 2012, MFS filed a supplemental response (Doc. 48) in which it
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stated that SJN (Singapore) is an entirely different entity from SJN, and that it was a former
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joint venture between SJN and Dasin. MFS reiterated that SJN is registered in the Republic
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of the Marshall Islands, with a principal place of business in Bainbridge Island, Washington,
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United States. MFS also pointed out that SJN shares a Washington business address with
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an entity called San Juan Navigation LLC (“SJNL”), and that none of the members of SJNL
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listed on SJNL’s certified annual report (introduced as an exhibit by MFS) are officers,
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directors, or shareholders of MFS or Dasin.
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On March 26, 2012, Magistrate Judge Gallo entered an order vacating the attachment
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(Doc. 55). In that order, Magistrate Judge Gallo found that MFS owned the bunkers at the
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time of service of the writ of attachment (November 21, 2011), since SJN had transferred its
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ownership interest in the bunkers to MFS in the November 11, 2011 letter, and MFS paid the
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balance on the invoice for the bunkers on November 17, 2011. (Doc. 55 at 6.) The order
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also found, “[u]pon reviewing all documents, [that] it is clear to the Court that [SJN] is a
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separate and distinct entity from San Juan (Singapore) and Mandarin Fortune.” (Id. at 10.)
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Of particular probative value to the Magistrate Judge were the passage from SJN’s website
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stating that “[o]ur Singapore office is a joint venture between noted Chinese shipowner DaSin
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and San Juan Navigation” (id.), and a November 16, 2011 email from Dasin to SJN regarding
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the payment of the outstanding balance on the bunkers, in which a representative from Dasin
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wrote:
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Owners are arranging payment of the attached invoice on a without prejudice
basis but hereby call upon SJN to immediately reimburse the sum remitted.
Unless and until SJN do[es] so, the bunkers will of course be Owners’ property.
All Owners’ rights remain expressly reserved.
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(Id. at 11 (citing Doc. 30-1, Ex. G at 4 (email dated 16 November 2011)).) Magistrate Judge
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Gallo noted that “[t]hese are not the words of a company paying the debt of its subsidiary or
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alter ego.” (Id.) Magistrate Judge Gallo denied Plaintiffs’ request for limited discovery
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regarding their alter ego theory on the grounds that “the documentation before the Court is
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more that adequate to show ownership[, the] discovery requests [are] overbroad and
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unnecessary[,] . . . [and] all the evidence before the Court indicates that [Plaintiffs are] not
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likely to find anything to support [their] alter ego theory.” (Id. at 4-5.) Magistrate Judge Gallo
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stayed the execution of its order pending this Court’s resolution of the present objection.
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DISCUSSION
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In their present objection (Doc. 57), Plaintiffs request this Court to reverse the order
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vacating attachment, or, in the alternative, to stay execution of that order and to permit
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Plaintiffs to conduct limited jurisdictional discovery. In the event this Court affirms Magistrate
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Judge Gallo’s order, Plaintiffs request a further stay of the vacatur order pending appeal to
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the Ninth Circuit. For the reasons set forth below, the Court adopts the recommendation of
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the magistrate judge that the order be vacated, grants Plaintiffs’ request for limited
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jurisdictional discovery, and grants Plaintiffs’ request for a stay of the vacatur order pending
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further proceedings in this Court.
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The Court addresses IMI’s motion for leave to intervene (Doc. 33) in the final subpart
of this discussion.
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a.
Standard of review
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Ordinarily, an order vacating a maritime attachment is reviewed for abuse of
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discretion, although legal conclusions underpinning the order are reviewed de novo. See
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Equatorial Marine Fuel Management Services Pte. Ltd. v. MISC Berhad, 591 F.3d 1208,
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1210 (9th Cir. 2010) (citing Williamson v. Recovery Ltd. P’ship, 542 F.3d 43, 48 (2d Cir.
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2008)). However, the Court agrees with Plaintiffs that MFS’s original motion to vacate the
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attachment is a dispositive motion within the meaning of Rule 72(b) of the Federal Rules of
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Civil Procedure, since the effect of an order to vacate the attachment is to deprive the Court
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of jurisdiction. See United States v. Rivera-Guerrero, 377 F.3d 1064, 1068 (9th Cir. 2004)
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(“[W]e do not simply look to the list of excepted pretrial matters in order to determine the
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magistrate judge’s authority. Instead, we must look to the effect of the motion, in order to
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determine whether it is properly characterized as ‘dispositive or non-dispositive of a claim or
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defense of a party.’”).
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Accordingly, the Court treats Magistrate Judge Gallo’s order as a report and
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recommendation, and reviews it de novo. See Fed. R. Civ. P. 72(b)(1); Fed. R. Civ. P.
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72(b)(3) (“The district judge must determine de novo any part of the magistrate judge’s
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disposition that has been properly objected to. The district judge may accept, reject, or
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modify the recommended disposition; receive further evidence; or return the matter to the
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magistrate judge with instructions.”)
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b.
Merits of decision to vacate attachment
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In order to secure an attachment of a maritime defendant’s property, the plaintiff must
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establish each of the following: (1) the plaintiff has a valid prima facie claim against the
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defendant; (2) the defendant cannot be found within the district; (3) the defendant’s property
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may be found within the district; and (4) there is no statutory or maritime law bar to the
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attachment. See Equatorial Mar. Fuel Mgmt. Servs. PTE v. MISC Berhad, 591 F.3d 1208,
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1210 (9th Cir. 2010); Fed. R. Civ. P., Supp. R. B.
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After receiving notice of the attachment, the defendant may contest it under Rule
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E(4)(f) of the Supplemental Rules for Admiralty or Maritime Claims, and may do so by
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arguing that the plaintiff failed to meet one of the four conditions for attachment. Equatorial,
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591 F.3d at 1210. In a Rule E(4)(f) challenge, the plaintiff carries the burden of justifying the
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continued attachment. Id.; see also Fed. R. Civ. P., Supp. R. E(4)(f). The plaintiff need not
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prove its case at a Rule E(4)(f) hearing; rather, the plaintiff only needs to show “probable
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cause” for the issuance of the warrant or writ (i.e. that the plaintiff is “reasonably likely to
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prevail” on the merits of the contested issue). See OS Shipping Co. Ltd. v. Global Mar.
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Trust(S) Private Ltd., 11cv377, 2011 WL 1750449, at *5 (D. Or. May 6, 2011) (noting, in light
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of absence of binding Ninth Circuit authority, that “[n]umerous unpublished district court
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decisions support [the probable cause] standard”).
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The dispute in this case revolves around the third prong; specifically, whether the
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attached property (the bunkers) belonged to the defendant (SJN) at the time of service of the
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writ of attachment on November 21, 2011. Plaintiffs have not challenged Magistrate Judge
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Gallo’s conclusion that MFS actually owned and possessed the bunkers on November 21.
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Rather, they maintain that “SJN, MFS, and non-parties Dasin Shipping Pte. Ltd. and Dasin
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Holdings Pte. Ltd. are alter egos, dominated and controlled by the Dasin Holdings Group.”
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(Doc. 57 at 6.)
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With respect to the issue of corporate identity, “[f]ederal courts sitting in admiralty
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generally apply federal common law[,]” and thus “piercing of the corporate veil [is
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permissible] where a corporation uses it alter ego to perpetrate fraud or where it so
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dominates and disregards its alter ego’s corporate form that the alter ego was actually
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carrying on the controlling corporation’s business instead of its own.” Chan v. Soc’y
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Expeditions, Inc., 123 F.3d 1287, 1294 (9th Cir. 1997).
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In their objection, Plaintiffs submit to the Court the same set of documents produced
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before the magistrate judge showing a unity of officers/directors and a common corporate
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address for MFS, Dasin, and SJN (Singapore). However, Plaintiffs’ attempt to conflate SJN
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with SJN (Singapore) is undermined by the passage from SJN’s website--quoted in Plaintiffs’
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own brief (Doc. 57 at 8)--stating that SJN (Singapore) “is a joint venture between noted
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Chinese shipowner Dasin and San Juan Navigation.” Moreover, MFS’s statement that SJN
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(Singapore) was originally a joint venture between SJN and MFS, and is now wholly owned
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by MFS, finds support in the documentary record. For example, MFS submitted a Singapore
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Accounting and Corporate Regulatory Authority (“ACRA”) Report for SJN (Singapore) (Doc.
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58-3, Ex. L), current as of April 28, 2010, indicating that at the time of the report, “Edmund
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Grundy Ellis”2 was a director of SJN (Singapore), and that half of the shares of SJN
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(Singapore) belonged to “San Juan Navigation Corp.” However, Plaintiffs submitted a more
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recent ACRA Report, dated January 25, 2012, indicating that all of SJN (Singapore)’s shares
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are owned by Dasin Holdings Pte. Ltd., and that the only director of SJN (Singapore) is
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Zhang Lanshui, who has been a director since the date of incorporation in 2004. (Doc 57-2,
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Ex. 5.)
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Plaintiffs also claim that MFS paid for the bunkers on behalf of SJN, without receiving
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adequate consideration, but MFS has introduced documentary evidence (in the form of email
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correspondence with the seller of the bunker fuel and a copy of the invoice) showing its
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independent obligation to pay. Lastly, Plaintiffs note that SJN has represented on its website
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that the Mandarin Fortune was part of its “fleet of ships,” but Plaintiffs have not meaningfully
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refuted MFS’s explanation that charterers (such as SJN) commonly list chartered vessels
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(such as the Mandarin Fortune) as part of their fleet.
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In response to Plaintiffs’ objection, MFS has introduced documents demonstrating the
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corporate relationships between Dasin, MFS, SJN (Singapore) and SJN. The organizational
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chart appended to MFS’s opposition shows that SJN and MFS are related only through their
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joint venture, SJN (Singapore). See Doc. 58-4 at 12 of 12. MFS’s characterization of this
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relationship is supported by additional documentary evidence introduced by MFS showing
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that SJN (as opposed to SJN (Singapore)) is incorporated in the Republic of the Marshall
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Islands, is located in the State of Washington, and currently has no officers, directors, or
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shareholders in common with Dasin, MFS, or SJN (Singapore).
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introduced documentary evidence supporting the existence of an arms-length business
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relationship between MFS and SJN, including: (a) SJN’s November 11, 2011 letter informing
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MFS that SJN is ceasing operations and attempting to arrange a novation of IMI’s sub-
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charter to MFS; (b) a November 16, 2011 email from Dasin to SJN demanding immediate
Plaintiffs have also
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Edmund G. Ellis is the president of SJN and one of its directors, according to a
certificate of incumbency from the Trust Company of the Marshall Islands for “San Juan
Navigation Corp.,” dated April 1, 2008. (Doc. 58-3, Ex. K.)
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reimbursement of the amount paid on the invoice for the bunkers; and (c) a December 30,
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2011 email from an attorney acting on behalf of MFS, informing SJN that MFS has appointed
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an arbitrator “in respect of any and all disputes arising out of on in connection with the
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Charterparty” between MFS and SJN (Doc. 58-3, Ex. H).
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The Court agrees with Magistrate Judge Gallo’s determination that Plaintiffs have not,
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at this time, established probable cause that MFS and SJN are in any sort of alter ego
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relationship.
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c.
Request for limited jurisdictional discovery
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Plaintiffs contend that the magistrate judge abused his discretion by refusing to permit
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limited jurisdictional discovery regarding Plaintiffs’ alter ego theory. “Discovery should
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ordinarily be granted where pertinent facts bearing on the question of jurisdiction are
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controverted or where a more satisfactory showing of the facts is necessary.” Butcher’s
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Union Local No. 498 v. SDC Inv., Inc., 788 F.2d 535, 540 (9th Cir. 1986) (citation omitted).
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“Although a refusal to grant discovery to establish jurisdiction is not an abuse of discretion
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when it is clear that further discovery would not demonstrate facts sufficient to constitute a
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basis for jurisdiction, discovery should be granted when, as here, the jurisdictional facts are
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contested or more facts are needed.” Laub v. U.S. Dept. of Interior, 342 F.3d 1080, 1093
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(9th Cir. 2003) (citation and quotation marks omitted).
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In denying Plaintiffs’ request for limited jurisdictional discovery, Magistrate Judge Gallo
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stated that “all the evidence before the Court indicates that [Plaintiff] is not likely to find
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anything to support its alter ego theory.” (Doc. 55 at 5.) The Court disagrees. Although
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Plaintiffs have failed to show probable cause that MFS and SJN are in an alter ego
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relationship, they have shown a business relationship between MFS and SJN that greatly
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exceeds the contractual relationship formed by the Mandarin Fortune charter party. Although
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MFS calls SJN (Singapore) a “former joint venture” with SJN (Doc. 48 at 3 (emphasis
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added)), a printout from SJN’s website, dated November 14, 2011, describes SJN
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(Singapore) as “[o]ur Singapore office,” and describes it as a current joint venture with Dasin.
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See Doc. 57-2, Ex. 2.
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Bearing in mind that “[a]n erroneous attachment of funds is extremely burdensome
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on the companies whose funds are attached[,]”3 the Court finds that expedited, limited
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jurisdictional discovery is appropriate in this case to afford Plaintiffs an opportunity to
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establish their alter ego allegations.
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d.
IMI’s motion for leave to intervene
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On January 10, 2012, Plaintiffs filed a motion (Doc. 26) requesting an order that would
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attach and garnish debts owed by IMI (the sub-charterer of the Mandarin Fortune in
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November 2011) to Defendants (in the amount of $77,630.97). On January 23, 2012, IMI
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filed a motion for leave to intervene, fearing exposure to multiple liabilities on this amount.
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IMI does not assert any interest in the $300,000 originally attached in this action. On March
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26, 2012, after IMI’s motion for leave to intervene had been submitted on the papers,
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Magistrate Judge Gallo denied Plaintiffs’ motion to attach debts owed by IMI, reasoning that
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Plaintiffs “fail[ed] to provide any basis for the Court to determine that the debt or funds are
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present in this District such that the Court may assert Rule B jurisdiction over them.” See
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Doc. 54 at 2 (emphasis in original). No party objected to Magistrate Judge Gallo’s order on
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this motion, nor does the Court see any reason to question his conclusion.
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This proceeding is ancillary to the arbitrations in which Plaintiffs seek recovery against
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Defendant SJN, and the sole purpose of this proceeding is to protect Plaintiffs’ ability to
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satisfy a judgment against SJN in those arbitrations. See Aqua Stoli Shipping Ltd. v.
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Gardner Smith Pty Ltd., 460 F.3d 434, 437-38 (2d Cir. 2006) (“The [purpose of the] power
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to grant attachments in admiralty is . . . two-fold: first, to gain jurisdiction over an absent
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REA Navigation, Inc. v. World Wide Shipping Ltd., 08 Civ. 9951, 2009 WL 3334794,
at *3 (S.D.N.Y. Oct. 14, 2009).
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defendant; and second, to assure satisfaction of a judgment.”). The role of the Court in this
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proceeding is not to determine the general prioritization of creditors for SJN or IMI. Thus, the
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Court denies IMI’s motion for leave to intervene without prejudice. To the extent IMI believes
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the Court has personal jurisdiction over all relevant parties, IMI may seek relief by filing an
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interpleader action pursuant to Federal Rule of Civil Procedure 22.
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CONCLUSION
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For the reasons set forth above, the Court ADOPTS the magistrate judge’s order
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vacating the attachment without prejudice, based on the present record. However, the Court
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STAYS the vacation of the attachment until September 30, 2012.
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Plaintiffs may engage in the following jurisdictional discovery: (a) eight reasonably
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narrow document requests; (b) ten reasonably narrow interrogatories (no subparts will be
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allowed); (c) two depositions not to last longer than six hours each; and (4) no requests for
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admissions. This discovery shall be completed by August 15, 2012. Plaintiff may then file
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a motion for reconsideration before this Court on or before August 22, 2012. Any opposition
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shall be filed on or before August 29, 2012. A reply may be filed by September 5, 2012. The
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Court will hear oral argument on any such motion for reconsideration on September 12,
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2012, at 4:00 p.m. Any disputes regarding discovery shall be resolved forthwith before the
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magistrate judge so as not to interfere with this scheduling order.
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The Court DENIES IMI’s motion for leave to intervene, without prejudice to IMI filing
an action for interpleader in the appropriate jurisdiction.
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IT IS SO ORDERED.
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DATED: July 11, 2012
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BARRY TED MOSKOWITZ, Chief Judge
United States District Court
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11cv02694 BTM (WVG)
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