Ray Capital Inc et al v. M/V Newlead Castellano et al

Filing 109

ORDER denying 99 Motion to Stay. The Clerk is directed to terminate 60 Motion to Consolidate Cases; 68 Motion for Hearing; and 82 Motion to Expedite. Signed by Judge J. Randal Hall on 11/18/2016. (thb)

IN THE UNITED
FOR THE

STATES DISTRICT COURT

SOUTHERN DISTRICT OF GEORGIA
SAVANNAH DIVISION
IN ADMIRALTY

RAY CAPITAL INC.;

OPPENHEIM

*

CAPITAL LTD.; CHEYENNE HOLDINGS *
LTD.; and LABROY SHIPTRADE
*
LIMITED,

*

Plaintiffs,

*

v.

*

CV

M/V NEWLEAD CASTELLANO, IMO NO.
9686338, her engines, tackle,
equipment, furniture,
appurtenances, etc., in rem,

*
*
*
*

and NEWLEAD CASTELLANO LTD.,

416-093

*
•

Defendants.

*

ORDER

This

matter

comes

before

the

Court

on

a

motion

to

stay

pending interlocutory appeal by attempted-intervenor DHL Project
& Chartering Limited
response

in

("DHL").

opposition.

(Doc.

(Doc.

99.)

104.)

Plaintiffs

For

the

filed a

reasons

stated

herein, DHL's motion to stay pending interlocutory appeal
99)

(doc.

is DENIED.

On September 8,
this

case

pursuant

24(a).

(Doc.

motion

to

demonstrate

2016,

80.)

to

Federal

Rule

On October 5,

intervene
a

DHL filed a motion to intervene in

on

sufficient

the

2016,

grounds

interest

of

Civil
the

that

relating

Procedure

Rule

Court denied DHL's

DHL
to

had
the

failed

to

property

or

transaction which is the subject of this action.
October 11,

2016,

DHL filed

its Notice of

and its instant motion to stay.1
2016,

the

Eleventh

denying DHL's

Circuit

(Doc.

of

On

Interlocutory Appeal

(Docs. 98, 99.)

Court

94.)

Appeals

On November 2,

entered

an

"Emergency Motion to Stay Pending Appeal

Order

and for

an Interim Order Pending the Decision on the Stay Application.'7
(Doc.

107.)

"A

stay

exercise

of

is

not

judicial

a

matter

of

discretion"

right,"

whose

but

propriety

upon the circumstances of the particular case."

556

U.S.

States,

418,
272

426

U.S.

(2009)
658,

672

(1926)).

on

the

merits;

and

(quoting Hilton v.

1

On

whether

stay;

(3)

the

two

October

(4)

where

Braunskill,

factors

"are

14,

Plaintiffs

2016,

the

dependent
Holder,

v.

United

whether

"(1)

applicant

to

whether

the public

481 U.S.
most

filed

770,

776

motion

to

be

the

interested in

interest

critical,"

a

will

whether issuance of

substantially injure the other parties

the proceeding;

first

In determining

"an

strong showing that he is likely

(2)

irreparably injured absent a
stay will

Co.

a court must consider:

the stay applicant has made a
succeed

"is

is

Nken v.

(quoting Virginian Ry.

issue a stay pending appeal,

to

rather

lies."

Id.

(1987)).

The

and

the

vacate

DHL's

party

Rule

B

attachment and garnishment of the Vessel in the matter of DHL Project &
Chartering Limited v. Newlead Holdings Ltd., et al.t Case No. 4:16-CV-123
(S.D.

Ga.)

(the "DHL Action").

(DHL Action,

Doc.

16.)

On November 18,

2016,

the Court granted Plaintiffs' motion to vacate on the grounds that DHL had
failed to demonstrate a prima facie entitlement to attachment and has failed
to satisfy the applicable and federal rules.
(DHL Action, Doc. 24.)

requesting

the

possibility"
(citations

A

relief

demonstrate

or

irreparable

"The

party

of

Molinera,

discretion."

proceedings

exception,

not

than

harm.

a

Id.

requesting

a

"mere

at

stay

434-35

bears

the

merits

the

Id.

pending

rule.

at

an

433-34

(citations

interlocutory

Fitzgerald

Court

of

finds

its

that DHL

appeal

and

substantial case on its merits.

applicant generally must

v.

1453

(11th

Cir.

omitted).

appeal

Compania

is

Naviera

unlikely to

the

La

DHL

does

succeed on

not

In order to obtain a

demonstrate

1986) .

is

that

success on the merits on appeal."

"a probable

stay,

the

applicant's

request

"substantial

appeal

case

may

on

concern

the

this

be

granted

merits."

Court's

on

balance

a

Id.

of

lesser
Here,

finding

in

a
an

likelihood of

Garcia-Mir v. Meese,

Where

have

781 F.2d
the

other

factors weighs heavily in favor of granting a stay, however,

DHL's

the

394 F. Supp. 402, 412 (E.D. La. 1974).

Here,

1450,

more

showing that the circumstances justify an exercise of

courtfs]

stay

the

of

must

omitted).

burden of
[the

stay

showing

the

its

the

of

merits

of

Order

dated

October 5, 2016 that DHL had failed to demonstrate a sufficient

interest

relating to the property or transaction which is the

subject of this action to justify its request to intervene as
matter
(See

of

right

Doc.

94.)

under

Federal

Specifically,

Rule
this

of

Civil
Court

Procedure
found

24(a).

that

interest in the subject matter of the instant action

DHL's

is:

(a)

purely economic given that DHL is not a party to - nor does it

have a legally protectable interest in - the promissory notes or
preferred

claims;

ship

mortgages

and (b)

that

form

the

basis

of

Plaintiffs'

highly speculative given that DHL's interest is

contingent upon the outcome of other pending litigation.
at

6-8

Inc.,

(citing

Mt.

Hawley

425 F.3d 1308,

Nevertheless,

1311

DHL

Ins.

Co.

(11th Cir.

argues

v.

Sandy

Lake

(Id.

Properties,

2005)).)

that

it

is

likely to

prevail

on

appeal because it allegedly has a limited property right and/or
security

interest

Castellano,

IMO No.

res thereof)

its

own

in

as a

action,

Holdings Ltd.,

the

Defendant

9686338

(the

"Vessel")

result of the Rule B

DHL Project

et al.,

Action").

Given

attachment

granted

vessel,

to

the

& Chartering

DHL

Court
in

recently

the

Newlead

(and any substitute

attachment it obtained in

Case No. 4:16-CV-123

that

M/V

DHL

Limited

v.

(S.D. Ga.)
vacated

Action,

Newlead
(the "DHL

the

Rule

however,

B

any

property right and/or security interest that DHL may have had in
the

Vessel

existence.

flowing

from

said

(See DHL Action,

Doc.

attachment
24.)

is

As such,

no

longer

in

DHL's basis for

intervention is now even weaker than when this Court originally
denied intervention.

Moreover,

the Court finds it unlikely that DHL will suffer

an irreparable injury absent a stay.

As admitted by DHL in its

motion

intervene

to

intervene,

DHL

desires

to

in

the

present

case

"for

the

[Plaintiffs]

purpose

for

[Defendants]."
Defendants,

to

opposing

summary

(Doc.

however,

foreclose

of

on

judgment

80,

at

on

1.)

the

their

motion

claims

Plaintiffs'

by

against

claims

against

are based on alleged breaches of - and seek

-

promissory

notes

and

is

not

a

between

Plaintiffs

and Defendants

Doc.

A stranger to a contract generally lacks standing to

18.)

to which DHL

mortgages

party.

(See

challenge the validity of that contract or otherwise advance any
defenses

on

behalf

Acceptance Corp.
367,

370

buyer

of

1968)

vessel

instruments

the

(In

based

related

to

legal

standing

instruments

or

purchaser as

or

advance

admiralty
upon

the

maritime lien for overhaul,

no

parties

thereto.

See

v. United Freight Forwarding Co.,

(D.N.J.
a

of

suit

defaulted

vessel,

28 6 F. Supp.

between
notes

Frontier

seller

and

intervenor

and

security

who

claimed

service and repair of the vessel had

status
any

to

challenge

defenses

on

the

behalf

financial

of

defendant

against seller since intervenor was a stranger to

the financial instruments).

Thus,

whether or not DHL is allowed

to intervene, DHL will not be entitled to challenge the validity

of

the

financial

instruments upon which Plaintiffs'

motion for

summary judgment relies or otherwise advance defenses on behalf
of

Defendants

financial

in

relation

instruments.

As

to

the

such,

alleged
DHL

will

breach

of

be

the

in

those
same

position

regardless

of

the

outcome

of

its

appeal,

and

thus

cannot be said to suffer an irreparable injury absent a stay.
For the foregoing reasons,

DHL's emergency motion for stay

pending appeal (doc. 99) is DENIED.2

ORDER ENTERED at Augusta,
November,

Georgia,

this

I^J— ^aY of

2016.

SLETJ. RANDAL HALL

UNITEJJ& STATES DISTRICT JUDGE
fERN DISTRICT OF GEORGIA

2 As a matter of housekeeping, the Court notes that there are several pending
motions or other filings on the present case's docket that have been resolved
or rendered unnecessary by the actions of the Court or the passage of time.
(Docs. 60, 68, 82; see also Docs. 75, 94; DHL Action, Doc. 11.) Accordingly,
the Clerk is DIRECTED to TERMINATE (a) DHL's motion to consolidate (doc. 60);

(b)

Plaintiffs'

motion for

confirmation hearing

motion for expedited briefing schedule (doc. 82).

(doc.

68);

and

(c)

DHL's